Gold gains, silver solidly up and sets new record high
Gold prices are higher in midday U.S. trading. Silver is sharply up and set another record high, at $61.055, basis March Comex futures, as of this writing. Technical buying is featured in both metals today, as their near-term and longer-term charts remain fully bullish. February gold was last up $26.10 at $4,244.40. March silver prices were up $0.725 at $59.13.
The Federal Reserve’s Open Market Committee (FOMC) began 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.
U.S. stock indexes are modestly firmer at midday and mostly pausing ahead of the FOMC results.
The key outside markets today see the U.S. dollar index slightly up. Crude oil prices are weaker and trading around $58.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.15%.
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 $4,285.00 and then at $4,300.00. 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 $62.50. The next downside price objective for the bears is closing prices below solid support at $56.85. First resistance is seen at the contract high of $61.055 and then at $62.00. Next support is seen at $59.00 and then at this week’s low of $57.77. Wyckoff's Market Rating: 9.5.
