(Kitco News) - Gold prices are firmer and silver prices solidly up in midday U.S. trading Wednesday. The two precious metals are being supported by a lower U.S. dollar index that hit a three-week low today, and by a dip in U.S. Treasury yields at mid-week. December gold was last up $13.80 at $3,412.30. September silver prices were up $0.553 at $38.55.
The gold and silver markets are also seeing buying interest as more Wall Street firms are forecasting the Federal Reserve will begin cutting U.S. interest rates in September as the labor market weakens and inflation remains relatively tame. The Fed will likely lower the main interest rate by 25 basis points at the September FOMC meeting, followed by two more cuts in December and March, Nomura economists forecast. Markets are also pricing in Fed rate cuts, indicating a September cut and positioning for another reduction in December. U.S. consumer price data Tuesday showed the core reading (minus food and energy) increased 3.1% in July, year-on-year, which was just above market expectations but not considered problematic.
The Bank of Thailand today cut its key interest rate and signaled it will remain accommodative as higher U.S. tariffs risk setting off a prolonged period of economic weakness. The central bank’s Monetary Policy Committee voted unanimously Wednesday to cut the one-day repurchase rate by 25 basis points to 1.5%. The move was not a surprise. The BOT has now delivered a total of 100 basis points in rate cuts in an easing cycle that began last October.
The key outside markets today see the U.S. dollar index lower, with crude oil prices down a bit and trading around $62.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.23%.
Technically, December gold futures bulls have the firm overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $3,500.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the July low of $3,319.20. First resistance is seen at $3,425.00 and then at $3,450.00. First support is seen at this week’s low of $3,379.10 and then at $3,350.00. Wyckoff's Market Rating: 7.0.
September silver futures bulls have the firm overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the July high of $39.91. The next downside price objective for the bears is closing prices below solid support at the July low of $36.28. First resistance is seen at last week’s high of $38.875 and then at $39.00. Next support is seen at $38.00 and then at this week’s low of $37.515. Wyckoff's Market Rating: 7.0.
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