(Kitco News) - Gold and silver prices are higher in midday U.S. trading Wednesday, but down from earlier highs, on corrective rebounds following recent strong selling pressure that inflicted serious chart damage to suggest near-term market tops are in place. The fundamentally bullish aspect of a U.S. interest rate cut today is also supporting the precious metals markets. December gold was last up $47.70 at $4,030.50. December silver prices were up $0.866 at $48.20.
The Federal Reserve’s Open Market Committee meeting that began Tuesday morning ends this afternoon with a statement and press conference from Fed Chairman Jerome Powell. The FOMC this afternoon is widely expected to deliver a second straight 0.25% interest-rate cut. While the Fed rate cut is widely expected, traders and investors will closely examine the FOMC statement and Powell’s press conference, for any fresh clues on the trajectory of U.S. monetary policy in the coming months. Said Bloomberg in a report: “Traders are looking to Powell’s remarks to determine their next move at a time when U.S. policymakers have grown increasingly divided on the outlook for interest rates. A softening labor market is bolstering the case for easing, although that’s being complicated by data showing that a core measure of inflation remains well above target. Swaps pricing indicates that investors have fully priced in a quarter-point rate reduction at the Fed decision on Wednesday, and around three more cuts by July. But Powell’s comments may alter the equation, which could set the stage for Treasuries to snap out of their inertia.”
The key outside markets today see the U.S. dollar index higher. Crude oil prices are firmer and trading around $60.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 3.99%.
Note: The gold market operates through two primary pricing mechanisms. The first is the spot market, which quotes prices for on-the-spot purchase and immediate delivery. The second is the futures market, which sets prices for delivery at a future date. Due to year-end positioning market liquidity, the December gold futures contract is currently the most actively traded on the CME.
Technically, December gold futures bulls’ next upside price objective is to produce a close above solid resistance at $4,100.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,800.00. First resistance is seen at $4,050 and then at $4,100.00. First support is seen at $4,000.00 and then at the overnight low of $3,930.00. Wyckoff's Market Rating: 5.5.
December silver futures bulls' next upside price objective is closing prices above solid technical resistance at $50.00. The next downside price objective for the bears is closing prices below solid support at $45.00. First resistance is seen at today’s high of $48.51 and then at $49.00. Next support is seen at the overnight low of $46.92 and then at this week’s low of $45.51. Wyckoff's Market Rating: 5.5.
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