Slight gains in gold, silver sells off on profit taking
Gold prices are trading slightly up in midday U.S. trading Tuesday, while the silver market is sharply lower. Both markets are seeing some profit taking from the shorter-term futures traders after prices Monday hit record highs. April gold was last up $5.30 at $5,127.80. March silver prices were down $7.444 at $108.135.
The Federal Reserve’s two-day Open Market Committee (FOMC) meeting began this morning and ends early Wednesday afternoon with a statement and press conference from Fed Chair Jerome Powell. The FOMC is expected to keep U.S. monetary policy unchanged. However, as always, the FOMC statement and Powell’s remarks at his presser will be very closely parsed by the marketplace for any clues regarding the trajectory of monetary policy in the coming months, including Fed officials’ takes on inflation.
Another U.S. government shutdown looms. U.S. Senate Democrats and Republicans are hurtling toward another federal government shutdown after a Senate Democrat revolt against funding the Department of Homeland Security without new protocols, amid the turmoil in Minneapolis at present. “A shutdown could have widespread effects, from potential delays at the Internal Revenue Service as tax season starts to delays in producing key government economic data, but would have little practical effect on Immigration and Customs Enforcement and the Border Patrol. Senate Republicans are signaling they’ll resist Democrats’ demands for restraints on ICE and Border Patrol, such as warrant requirements and a body camera mandate, and plan to reject Democratic demands to split off DHS funding from the larger spending package,” said a Bloomberg report.
The key outside markets today see crude oil prices higher and trading around $61.75 a barrel. The U.S. dollar index is sharply down and hit a four-month low. The U.S. 10-year Treasury note yield is presently 4.21%.
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, April gold futures bulls’ next upside price objective is to produce a close above solid resistance at $5,250.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $4,750.00. First resistance is seen at the record high of $5,145.20 and then at $5,200.00. First support is seen at the overnight low of $5,043.90 and then at $5,000.00. Wyckoff's Market Rating: 9.5.
March silver futures bulls have the strong chart advantage and their next upside price objective is closing prices above solid technical resistance at $125.00. The next downside price objective for the bears is closing prices below solid support at $100.00. First resistance is seen at $110.00 and then at the overnight high of $113.55. Next support is seen at $105.00 and then at the overnight low of $102.90. Wyckoff's Market Rating: 9.0.
