Gold Price Weaker on Corrective Pullback from This Week's Good Gains; FOMC Deemed Slightly Hawkish
San Francisco (Apr 29) Gold prices were moderately lower late U.S. trading Wednesday. A technical correction from the solid gains posted Monday and Tuesday was featured today. Gold prices did modestly extend earlier losses in the wake of the latest FOMC statement this afternoon. June Comex gold was last down $8.00 at $1,206.00 an ounce. May Comex silver was last up $0.044 at $16.635 an ounce.
The U.S. Federal Reserve’s Open Market Committee (FOMC) meeting statement said the U.S. economy weakened in the first quarter, but said the weakness is likely transitory and implied that the economy will pick up speed in the second quarter. The market place read that as just a bit hawkish on U.S. monetary policy. Still, at this point very few expect the Fed to make an interest rate hike in June. No press conference from Fed Chair Janet Yellen was scheduled for this meeting.
The U.S. advance first-quarter gross domestic product estimate, released Wednesday morning, came in at up 0.2%, which was a miss to the downside. Forecasts called for the GDP reading to come in at up 1.0%, year-on-year. This compares with a plus 2.2% figure in the fourth quarter of last year. The market place closely scrutinized that report, given the wobbly stature of U.S. economic growth evidenced in data released the past several weeks. The data falls into the camp of the U.S. monetary policy doves. Gold prices did see a slight rebound from lower levels following this data.
The sharp drop in the U.S. dollar index today and sharply higher crude oil prices did not give much help to the gold and silver bulls today. However, the price action in these key “outside markets” recently is favorable to raw commodity market bulls. Chart actions for both markets hints the dollar index has put in a market top, while crude oil has put in a market bottom.
There may be some slight progress in the Greece-European Union/IMF debt restructuring talks. Reports said Greece’s reshuffling of its negotiating team may be benefitting the talks. Greek bond yields have backed down from last week’s very high levels, in a sign of somewhat less anxiety in the market place on the matter. However, a German EU official termed the current status of the Greek debt talks “precarious.”
The London P.M. gold fix is $1,209.00 versus the previous A.M. fixing of $1,204.80.
Technically, June gold futures prices were nearer the session low in late trading. Bulls still have some upside technical momentum. Gold bears do still have the overall near-term technical advantage. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the March high of $1,224.50. Bears' next near-term downside price breakout objective is closing prices below solid technical support at last week’s low of $1,174.10. First resistance is seen at this week’s high of $1,214.90 and then at $1,220.40. First support is seen at $1,200.00 and then at $1,190.00. Wyckoff’s Market Rating: 3.5
May silver futures prices closed nearer the session high today and hit another three-week high on more short covering and bargain hunting. The key “outside markets” were fully bullish for silver today as the U.S. dollar index was sharply lower and crude oil prices were solidly higher. Silver bears still have the overall near-term technical advantage. However, bulls have gained upside momentum this week. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at last week’s low of $15.55. First resistance is seen at today’s high of $16.685 and then at $16.85. Next support is seen at today’s low of $16.385 and then at $16.00. Wyckoff's Market Rating: 3.5.
May N.Y. copper closed up 130 points at 279.30 cents today. Prices closed nearer the session high on more short covering. The key “outside markets” were fully bullish for copper today as the U.S. dollar index was sharply lower and crude oil prices were solidly higher. The copper market bears have the slight near-term technical advantage. Prices are still in a four-week-old downtrend on the daily bar chart. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the April high of 283.10 cents.