(Kitco News) - Gold and silver prices are firmer in early U.S. trading Wednesday, ahead of the latest U.S. monetary policy decision announcement from the Federal Reserve this afternoon. Some safe-haven demand is seen at mid-week. The “outside markets” are also in firmly bullish daily postures for the precious metals today: the U.S. dollar index is sharply lower, crude oil prices are sharply higher and U.S. Treasury yields have down-ticked at mid-week. December gold was last up $11.90 at $2,463.80. September silver was up $0.355 at $28.88.
In overnight news, an air strike killed the leader of Hamas in Tehran, Iran. Israel is widely believed to have carried out the assassination. This news infuriated Iran and its proxy militant groups around the Middle East. The assassination threatens to cause a major flare-up in military action in the region, possibly including a direct confrontation between Israel and Iran. Gold and silver prices saw some safe-haven buying after the news.
Asian and European stock indexes were mostly higher overnight. U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins.
The Bank of Japan Wednesday raised its main interest rate to 0.25% from zero. The BOJ also said it would reduce its government bond buying by half. The news rallied the yen against the U.S. dollar. The tighter monetary policy in Japan, combined with the likely upcoming U.S. interest rate cuts this year, has shifted global investment flows, including the so-called “carry” trades being unwound.
Meantime, the Euro zone consumer price index in July was up 2.6%, year-on-year, versus up 2.5% in June and above the consensus forecast for up 2.4%.
The key outside markets today see the U.S. dollar index solidly lower. Nymex crude oil prices are solidly higher and trading around $77.00 a barrel. The benchmark 10-year U.S. Treasury note yield is presently 4.145%.
Other U.S. economic reports out Wednesday include the weekly MBA mortgage applications survey, the ADP national employment report, the employment cost index, the Chicago ISM business survey, pending home sales and the weekly DOE liquid energy stocks report.
Technically, December gold bulls have the firm overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $2,537.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,350.00. First resistance is seen at the overnight high of $2,470.40 and then at $2,481.10. First support is seen at the overnight low of $2,449.20 and then at $2,425.00. Wyckoff's Market Rating: 7.0.
September silver futures bears have the overall near-term technical advantage. Prices are trending down on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $30.00. The next downside price objective for the bears is closing prices below solid support at the May low of $26.55. First resistance is seen at $29.00 and then at $29.50. Next support is seen at the overnight low of $28.39 and then at $28.00. Wyckoff's Market Rating: 4.0
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