FB: Gold Near Steady as Market Place Awaits FOMC Results, Bernanke Press Conference
Comex gold futures prices are trading not far from unchanged levels in early dealings Thursday morning. The market place is on hold ahead of Thursday’s FOMC conclusion and the following press conference by Fed Chairman Ben Bernanke. December gold last traded steady at $1,733.80 an ounce. Spot gold was last quoted up $0.40 an ounce at $1,732.50. December Comex silver last traded down $0.102 at $33.19 an ounce.
The FOMC meeting ends near midday Thursday and then Bernanke will hold a press conference in early afternoon. The market place has a slight bias that the Fed will announce QE3, or some sort of fresh monetary stimulus package, on Thursday. But even if the Fed does not make a stimulus move on Thursday, the majority of the market place believes the U.S. central bank will act to ease monetary policy in the coming weeks. No significant action at all by the Fed Thursday would disappoint many commodity and stock market bulls and could put downside price pressure on many markets, including the precious metals.
In other overnight news, the Italian government had a successful long-term bond offering, with most agreeing the debt sale went well due to the European Union’s recent proclamations to support governments’ debt sales by having the European Central Bank sop up any excess debt. Also, Greece’s unemployment rate rose to a record high of 23.6% in in the second quarter.
The U.S. dollar index is weaker again in early trading Thursday. Prices Wednesday hit another four-month low. The greenback bears have the solid near-term technical advantage as a seven-week-old downtrend line is in place on the daily bar chart. Meantime, crude oil prices are slightly higher Thursday morning and are trading near the summertime high. Oil bulls still have the overall near-term technical advantage. These two key “outside markets” are in a mildly bullish posture for the precious metals Thursday and will continue to have a daily influence on precious metals prices.
U.S. economic data due for release Thursday includes the weekly jobless claims report, new residential construction, existing home sales and the FOMC results.
The London A.M. gold fixing is $1,730.50 versus the previous A.M. fixing of $1,737.00.
Technically, December gold futures prices hit a six-month high Wednesday and the bulls are in firm near-term technical command. Gold prices are in a two-month-old uptrend on the daily bar chart. The gold bulls’ next upside price breakout objective is to produce a close above solid technical resistance at $1,775.00. Bears’ next near-term downside price objective is closing prices below psychological support at $1,700.00. First resistance is seen at this week’s high of $1,749.50 and then at $1,760.00. First support is seen at this week’s low of $1,727.00 and then at $1,716.90.
December silver futures prices Wednesday and hit a fresh six-month high, but then backed off to close lower. Prices scored a mildly bearish “outside day” down on the daily bar chart Wednesday, whereby the high was higher and low was lower than the previous session’s trading range, with a lower close. If there is good follow-through selling pressure and a lower close on Thursday, then a bearish “key reversal” down would be confirmed, and that would be an early technical clue that a near-term market top is in place. But right now silver bulls are still in firm near-term technical command. Prices are still in a six-week-old uptrend on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $35.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $32.00. First resistance is seen at the overnight high of $33.335 and then at last week’s high of $33.775. Next support is seen at the overnight low of $32.965 and then at this week’s low of $32.51.
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By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
