Gold Weaker as FOMC Meeting Focuses

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(Kitco News) – Gold prices are down slightly but up from daily lows on Monday midday in the US. Silver prices are stable to slightly higher. A higher US dollar index and rising bond yields limit buyer interest in precious metals to start the trading week. As has been the case for some time, traders and investors appear to be favoring the greenback and US Treasuries as perceived safe havens over precious metals. October gold was last down $3.80 at $1,669.00 and December silver was up $0.009 at $19.39.

The market’s focus is now on this week’s FOMC meeting which begins Tuesday and ends Wednesday afternoon. The FOMC is widely expected to raise the US federal funds rate by 0.75% as part of the Fed’s efforts to curb problematic price inflation. However, there is scattered talk that the Fed could make a full 1.0% rate hike. An investment bank’s research team said the Fed’s 100 basis point hike was possible but unlikely. The Bank of England is also holding its monetary policy meeting later this week.

Global stock markets were mostly down overnight. U.S. stock indexes fell midday and at or near two-month lows. Traders and investors remain nervous to start the trading week, amid fears of a US and/or global recession.

Major outside markets are seeing Nymex crude oil prices firming today and trading around $85.50 a barrel. The US dollar index is higher. The yield on the 10-year US Treasury bond reached 3.48%. The yield on 2-year US Treasuries rose to 3.927%. The 2-year/10-year inverted yield curve is an indicator of an impending economic recession in the United States.

Technically, October gold futures prices hit a near 2.5-year low last Friday. Bearish gold futures have the strong overall short-term technical advantage and gained momentum today. The Bulls’ next upside price objective is to produce a close above the strong resistance at $1,700.00. Bears next short-term downside price objective is to push futures prices below strong technical support at $1,600.00. First resistance is seen at today’s high of $1,678.00 and then at $1,686.30. First support is seen at last week’s low at $1,651.90 and then at $1,635.00. Wyckoff Market Rating: 1.0.

24 hour live money chart [ Kitco Inc. ]

December silver futures have the overall short-term technical advantage. The next upside price objective for the silver bulls is to close prices above the strong technical resistance at $21.00. The next downside price objective for the bears is to close prices below the strong support at $18.00. First resistance is seen at today’s high of $19.69 and then at $20.00. The next support is seen at $19.00 and then at last week’s low at $18.77. Wyckoff Market Rating: 2.5.

December New York Copper closed down 100 points at 350.55 cents today. Prices closed closer to the session low today. Copper bears have the overall short-term technical advantage. The next upside price objective for the copper bulls is to push and close prices above strong technical resistance at the August high of 378.35 cents. The next downside price target for the bears is for prices to close below strong technical support at the July low of 315.55 cents. First resistance is seen at today’s high of 355.80 cents then 360.00 cents. First support is seen at last week’s low of the September low of 354.40 cents and then at 350.00 cents. Wyckoff Market Rating: 3.0.

Disclaimer: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. This is not a solicitation to trade commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for loss and/or damage resulting from the use of this publication.

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