(Kitco News) - Gold prices are slightly lower in early U.S. trading Monday, with silver prices posting solid losses. Both metals are feeling the bearish effects of a recent strong rally in the U.S. dollar index and a rise in U.S. Treasury yields. Trading today and most of Wednesday is likely to be more subdued ahead of a major central bank meeting. August gold was last down $3.70 at $2,323.30. July silver was last down $0.569 at $29.305.
This morning begins the Federal Open Market Committee (FOMC) meeting of the Federal Reserve. The meeting ends Wednesday afternoon with a statement and press conference from Fed Chairman Jerome Powell. No changes in U.S. monetary policy are expected at this meeting, but as always the rhetoric coming from the Fed will be parsed by the marketplace.
On Wednesday comes a key U.S. inflation report—the consumer price index for May. Annual CPI is seen up 3.4%, which would be unchanged from the April annual CPI figure.
The Euro currency remains wobbly in the aftermath of weekend parliamentary elections in the European Union which showed right-wing politicians faring much better than expected. Reads a DowJones Newswire headline today: “Europe’s nationalist turn could stoke inflation, curb fiscal discipline.”
Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. The major U.S. indexes are not far below their recent record highs.
The key outside markets today see the U.S. dollar index firmer. Nymex crude oil prices are weaker and trading around $77.50 a barrel. The benchmark 10-year U.S. Treasury note yield is presently at 4.44%.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook retail sales report, the NFIB small business index, and the FOMC meeting begins.
Technically, August gold bulls have lost their overall near-term technical advantage. A bearish double-top reversal pattern has formed on the daily bar chart to suggest a near-term market top is in place. Bulls’ next upside price objective is to produce a close above solid resistance at last week’s high of $2,406.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the May low of $2,308.70. First resistance is seen at $2,335.00 and then at $2,350.00. First support is seen at the overnight low of $2,314.50 and then at last week’s low of $2,304.20. Wyckoff's Market Rating: 5.0.
July silver futures bulls have the overall near-term technical advantage but have faded. A price uptrend on the daily bar chart has been negated to suggest a near-term market top is in place. Silver bulls' next upside price objective is closing prices above solid technical resistance at the May high of $32.75. The next downside price objective for the bears is closing prices below solid support at $28.00. First resistance is seen at $30.00 and then at $30.50. Next support is seen at $29.00 and then at $28.50. Wyckoff's Market Rating: 6.0.
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