(Kitco News) - Gold and silver prices are just slightly lower in subdued early U.S. trading Wednesday, as the marketplace anxiously awaits the outcome of the FOMC meeting of the Federal Reserve that ends this afternoon with a statement and a press conference from Fed Chair Jerome Powell. February gold was last down $2.00 at $2,660.00 and March silver was down $0.106 at $30.815.
The FOMC committee is very likely to lower the main U.S. interest rate by a quarter-point. Some are calling it a “hawkish rate cut.” The FOMC statement and Fed Chair Powell are likely to signal fewer rate cuts next year than previously projected. Bloomberg reports that “bond traders aren’t so sure: They’ve been boosting wagers the Fed is about to signal deeper cuts than the market expects.”
Asian and European stock indexes were mixed to firmer overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.
In other news, there is increasing financial market turmoil in Brazil. Traders there are looking at the prospect of a financial crisis engulfing assets from stocks to local-currency debt. “The widening rout shows investors are increasingly skeptical that President Luiz Inacio Lula da Silva is serious about reining in a soaring fiscal deficit,” said a Bloomberg dispatch.
In Canada, Prime Minister Justin Trudeau tried to downplay the most serious challenge yet facing his leadership--the sudden resignation of Finance Minister Chrystia Freeland on Monday.
U.K. inflation rose to an eight-month high in November, pushing farther above the Bank of England’s 2% inflation target and effectively ending any hope of a rate cut at Thursday’s BOE monetary policy meeting. The Bank of Japan is expected to leave its rates unchanged after Thursday’s meeting.
The key outside markets today see the U.S. dollar index near steady. Nymex crude oil futures prices are modestly up and trading around $70.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.401%.
The BlackRock hedge fund says investors should consider adding more gold and Bitcoin to their portfolios, adding that government bonds have become less reliable against sell offs of riskier assets such as equities.
Other U.S. economic data release Wednesday includes the weekly MBA mortgage applications survey, new residential construction and the weekly DOE liquid energy stocks report.
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 Tuesday’s high of $2,675.80 and then at this week’s high of $2,683.40. First support is seen $2,650.00 and then at at this week’s low of $2,646.10. Wyckoff's Market Rating: 6.5.
March silver futures bulls and bears are on a level overall near-term technical playing field. 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 this week’s low of $30.615 and then at the November low of $30.095. Wyckoff's Market Rating: 5.0
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