(Kitco News) - Gold and silver prices are lower in midday U.S. trading Monday. Both precious metals markets are seeing selling pressure on worries the U.S. Federal Reserve will lean hawkish on its rhetoric despite delivering a rate cut this week. Also, prompting some selling pressure in gold and silver is news just out that U.S. producer inflation reports for October and November that were expected to be released later this week have now been delayed until January. That throws some more uncertainty into the present U.S. inflation situation. February gold was last down $27.60 at $4,215.50. March silver prices were down $0.788 at $58.28.
The Federal Reserve’s Open Market Committee (FOMC) begins its monetary policy meeting Tuesday morning, with the meeting ending Wednesday afternoon with an FOMC statement and then a press conference from Fed Chair Jerome Powell. Markets are pricing in a 90% chance of a 0.25% U.S. interest rate cut at this week’s FOMC meeting. However, market expectations are growing that the FOMC statement and Fed Chairman Powell’s comments at his press conference may lean hawkish on U.S. monetary policy—namely due to worries about sticky inflation.
In other news, the World Bank reports China’s central bank added to its gold reserves for a 13th straight month, according to data released on Sunday. Bullion held by the People’s Bank of China rose by 30,000 troy ounces last month, bringing the total to around 74.12 million troy ounces. The current buying cycle began in November 2024. Central-bank purchases worldwide ramped up in October after a lull in the middle of the year, according to the Council.
The key outside markets today see the U.S. dollar index firmer. Crude oil prices are weaker and trading around $59.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.15%.
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, February gold futures bulls’ next upside price objective is to produce a close above solid resistance at the contract/record high of $4,433.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $4,100.00. First resistance is seen at today’s high of $4,247.90 and then at $4,285.00. First support is seen at $4,200.00 and then at $4,150.00. Wyckoff's Market Rating: 7.0.
March silver futures bulls have the strong overall near-term technical advantage. A bull flag pattern has formed on the daily bar chart. Bulls’ next upside price objective is closing prices above solid technical resistance at $60.00. The next downside price objective for the bears is closing prices below solid support at $55.00. First resistance is seen at the contract high of $59.90 and then at $60.00. Next support is seen at the overnight low of $57.77 and then at last week’s low of $56.85. Wyckoff's Market Rating: 9.0.
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