Price gains for gold and silver at FOMC conclusion, Powell on deck

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(Kitco News) – Gold and silver prices are higher on Wednesday in the United States. The decline in the US Dollar Index and the stability of US Treasury yields mid-week are generating some buying interest. Traders await the big news of the week, if not the month, this afternoon: the conclusion of the FOMC meeting and the press conference by Fed Chairman Jerome Powell. Expect more market volatility this afternoon following these events. December gold was last up $10.40 at $1,659.80 and December silver was up $0.138 at $19.805.

The market is on hold ahead of the Federal Reserve’s Open Market Committee (FOMC) meeting which began Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chairman Powell. Most expect the FOMC to raise the federal funds rate another 0.75%. However, the million dollar questions for traders and investors may find an answer in comments from the FOMC and Powell regarding the future trajectory of US monetary policy. Specifically, will the Fed ditch the accelerator to aggressively raise interest rates and start pivoting? The FOMC/Powell indices of a pivot should boost risky assets like stocks and commodities. However, a still aggressive tone on US monetary policy from the Fed would likely put pressure on stocks, bonds and commodities. A Barron’s headline today reads: “Recession is the dark cloud hanging over Powell’s anti-inflationary Fed.”

Global equity markets were mixed overnight. US stock indices are heading for mixed highs at the start of the day’s session in New York.

In overnight news, the Eurozone received negative economic data as its October manufacturing purchasing managers’ index (PMI) came in at 46.4, slightly below expectations. of the market. A reading below 50.0 suggests contraction in the sector.

The market is still abuzz over unconfirmed reports that the Chinese government has set up a committee to end its zero-Covid policies. There has been no confirmation from Chinese government officials, with at least one senior official saying he knows nothing about the case.

Major overseas markets are seeing the US dollar index weakening today. Nymex crude oil prices are down slightly and are trading around $88.00 per barrel. The 10-year US Treasury yields 4.053%.

Other U.S. economic data due out on Wednesday includes the weekly mortgage applications survey, the ADP National Employment Report, the global manufacturing PMI and the DOE’s weekly Liquid Energy Inventories report. .

Technically, bearish gold futures still have the strong overall short-term technical advantage. 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 $1,670.90 and then at last week’s high at $1,679.40. First support is seen at this week’s low at $1,633.60 and then at the October low at $1,621.10. Wyckoff Market Rating: 2.5

Silver bulls have the overall short-term technical advantage. Prices are in a choppy uptrend on the daily bar chart. The next upside price objective for silver bulls is to close prices above strong technical resistance at the October high of $21.31. The next downside price objective for the bears is to close prices below the strong support at $18.00. First resistance is seen at this week’s high at $20.04 and then at $20.50. Next support is seen at $19.50 and then Tuesday’s low at $19.085. Wyckoff Market Rating: 5.5.