(Kitco News) - Gold and silver prices are modestly down in quieter early U.S. trading Tuesday, just ahead of the U.S. data point of the week: the FOMC meeting of the Federal Reserve that begins this morning and ends Wednesday afternoon with a statement and a press conference from Fed Chair Jerome Powell. Position-evening from the shorter-term futures traders ahead of the FOMC conclusion is featured early this week. February gold was last down $9.30 at $2,660.70 and March silver was down $0.257 at $30.80.
Said David Morrison of Trade Nation in an email dispatch this morning: “Investors are preparing themselves for tomorrow’s rate announcement from the U.S. Federal Reserve’s FOMC. There’s currently a 96% probability of a 25 basis-point rate cut. So, investors will be paying more attention to the FOMC’s quarterly summary of economic projections which provides forecasts for GDP growth, unemployment, inflation and the fed funds rate for 2025 and beyond.”
Gold may also see buying interest limited in part by concerns of U.S. stagflation, with the potential for a slowing labor market meeting higher inflation, constraining the Fed’s ability to cut interest rates.
Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins.
In other news, Bloomberg reports U.S. investors “are all-in on the U.S. stock market, while reducing cash holdings to a record low, according to Bank of America’s latest survey of fund managers. The bank says that could be a contrarian signal to sell the rally in U.S. stocks.”
Canada’s government is in crisis after Finance Minister Chrystia Freeland published a resignation letter critical of Justin Trudeau’s plan to boost spending. The Canadian dollar dropped and Canadian government bond yields jumped.
A top Russian general in charge of nuclear weapons was killed by a bomb in Moscow. A Ukraine official said its secret service was behind it
The key outside markets today see the U.S. dollar index firmer. Nymex crude oil futures prices are lower and trading around $70.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.42%.
A busy U.S. economic data release day Tuesday includes the weekly Johnson Redbook retail sales report, retail sales, industrial production and capacity utilization, the NAHB housing index and manufacturing and trade inventories.
Technically, February gold bulls have the overall near-term technical advantage but have faded. Prices are still in an uptrend on the daily bar chart, but just barely. Bulls’ next upside price objective is to produce a close above solid resistance at the December high of $2,761.30. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,600.00. First resistance is seen at this week’s high of $2,683.40 and then at $2,700.00. First support is seen at the overnight low of $2,651.10 and then at $2,635.60. Wyckoff's Market Rating: 6.5.
March silver futures bulls have lost their slight overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the December high of $33.33. The next downside price objective for the bears is closing prices below solid support at $30.00. First resistance is seen at this week’s high of $31.24 and then at $31.63. Next support is seen at the overnight low of $30.615 and then at the November low of $30.095. Wyckoff's Market Rating: 5.0.
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