(Kitco News) - Gold and silver prices are moderately lower in midday U.S. trading Tuesday, following a stronger-than-expected key U.S. economic report and just ahead of the U.S. data point of the week: the FOMC meeting of the Federal Reserve that began this morning and ends Wednesday afternoon with a statement and a press conference from Fed Chair Jerome Powell. February gold was last down $13.70 at $2,656.00 and March silver was down $0.147 at $30.90.
The November U.S. retail sales report showed a better-than-expected increase of 0.7%, month-on-month, and beat expectations for a rise of 0.5%. This report is bearish for the precious metals as it falls into the camp of the monetary policy hawks, who want to see the Federal Reserve hold off on further interest rate cuts. While the vast majority of the marketplace still expects the FOMC to cut its main interest rate by 0.25% on Wednesday afternoon, the notion of additional cuts in 2025 are now in serious question due to recent stronger U.S. economic data, including today’s retail sales report.
Gold is also likely seeing buying interest limited by some 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.
The key outside markets today see the U.S. dollar index near steady. Nymex crude oil futures prices are lower and trading around $69.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.381%.
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 today’s high of $2,675.80 and then at this week’s high of $2,683.40. First support is seen at the overnight low of $2,646.10 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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