(Kitco News) - Gold and silver prices are higher in early U.S. trading. Silver is near its recent record highs. Both precious metals markets are pausing ahead of the Fed’s FOMC meeting that begins today. February gold was last up $14.10 at $4,231.90. March silver prices were up $0.725 at $59.13.
The Federal Reserve’s Open Market Committee (FOMC) begins its monetary policy meeting this 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 from the Fed this week. However, market expectations are now growing that the FOMC statement and Fed Chairman Powell’s comments at his press conference may lean more hawkish on U.S. monetary policy—namely due to worries about sticky inflation. News Monday 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 threw more uncertainty into the present U.S. inflation situation.
Global stock markets were mixed overnight. U.S. stock indexes are pointed to slightly firmer openings when the New York day session begins.
Trump threatens tariffs on Canadian fertilizer, Indian rice. President Trump on Monday signaled he could impose new tariffs on agricultural products, including Canadian fertilizer and Indian rice. Trump spoke Monday at a White House event to announce new aid for farmers, some of whom said cheaper imports are making it difficult for their products to compete in the marketplace. Trump said he would "take care" of alleged dumping of Indian rice into the U.S. and suggested targeting fertilizer imported from Canada to boost domestic production, Bloomberg reported. Some farmers have blamed imports for falling U.S. rice prices, saying countries such as India, Vietnam and Thailand are undercutting the U.S. rice crops. “They shouldn’t be dumping,” Trump said. “I mean, I heard that, I heard that from others. You can’t do that.” Trump similarly suggested he could target fertilizer imported from Canada to boost domestic production. “A lot of it does come in from Canada, and so we’ll end up putting very severe tariffs on that, if we have to, because that’s the way you want to bolster here,” Trump said. “And we can do it here. We can all do that here.”
The key outside markets today see the U.S. dollar index slightly down. Crude oil prices are a bit firmer and trading around $59.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.16%.
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 $4,250.00 and then at $4,285.00. First support is seen at the overnight low of $4,197.80 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. The 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 this week’s low of $57.77 and then at last week’s low of $56.85. Wyckoff's Market Rating: 9.0.
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