FB: Comex Gold Slightly Up in Subdued Trading, as FOMC Awaited
Comex gold futures prices are trading slightly higher in early U.S. dealings Wednesday. The market place is quieter ahead of Wednesday afternoon’s conclusion of the Federal Reserve’s FOMC meeting. December gold last traded up $2.50 at $1,617.10 an ounce. Spot gold was last quoted down $1.50 an ounce at $1,614.00. September Comex silver last traded down $0.069 at $27.845 an ounce.
Focus of the market place Wednesday is on the early-afternoon conclusion of the two-day FOMC meeting of the U.S. Federal Reserve. It is not widely believed the Fed will announce a major new stimulus initiative (QE3) at this time. However, many believe such an announcement will occur in the coming weeks. Still, markets could move significantly in the aftermath of the FOMC statement, especially if there are some fresh hints dropped by the Fed on any future monetary actions, or lack thereof.
The European Central Bank’s policy meeting and press conference are on Thursday. The Bank of England also meets to discuss its monetary policy, with results on Thursday. The ECB is expected by many to announce a fresh monetary stimulus package. Major monetary easing moves by the major central banks of the world would be at least initially bullish for many markets, including the precious metals.
In overnight news, Germany’s economy minister reportedly said allowing the European Union’s new bailout fund to have broad banking powers is not a good way to go. The German Bundesbank president also made hawkish comments on the EU bailout process. Those remarks seem to run counter to recent statements from the European Central Bank president Mario Draghi, who last week said the ECB would do whatever it takes to keep the Euro currency in its present form. There was also more weak economic data coming out of the EU Wednesday. The Spanish 10-year bond yield was quoted just above 6.5%, while Italian bond yields were quoted just below 6% on Wednesday.
After the batch of central bank meetings are out of the way, focus of the market place will quickly turn to the U.S. employment report on Friday morning.
The U.S. dollar index is trading near steady in early dealings Wednesday, while crude oil prices are trading modestly higher. These two key “outside markets” are in a slightly bullish daily posture for the precious metals.
The London A.M. gold fix is $1,614.75 versus the previous London P.M. fixing of $1,622.00.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, the U.S. manufacturing PMI, construction spending, the ISM manufacturing report, the global manufacturing PMI, domestic auto sales and the FOMC announcement.
Technically, December gold futures bulls and bears are on a level near-term technical playing field and trapped in a choppy and sideways trading range. The gold bulls’ next upside price breakout objective is to produce a close above solid technical resistance at the June high of $1,646.40. Bears’ next near-term downside price objective is closing prices below psychological support at $1,600.00. First resistance is seen at last week’s high of $1,633.30 and then at $1,640.00. First support is seen at this week’s low of $1,614.20 and then at $1,605.00.
September silver futures prices hit a four-week high Tuesday. The silver bears still have the slight overall near-term technical advantage, but the bulls have gained some upside momentum recently. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at the July high of $28.445 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at last week’s low of $26.575. First resistance is seen at the overnight high of $28.02 and then at this week’s high of $28.335. Next support is seen at this week’s low of $27.515 and then at $27.31.
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