June 10, 2023

Gold price rise, silver on FOMC conclusion, Powell on deck

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(Kitco News) – Gold and silver prices are higher in the US on Wednesday. A low US dollar index and stable US government bond yields in the middle of the week stimulate buying interest. Investors await a week, if not a month, of big news this afternoon: the conclusion of the FOMC meeting and Fed Chairman Jerome Powell’s press conference. Look for more market volatility this afternoon following these events. December gold was last up $10.40 at $1,659.80 and December silver was up $0.138 at $19,805.

The market is on hold ahead of the Federal Reserve Open Market Committee (FOMC) meeting, which began Tuesday morning and will conclude Wednesday afternoon with a statement and press conference from Fed Chairman Powell. Most expect the FOMC to raise the Fed funds rate by another 0.75%. However, the FOMC and Powell’s comments on the future path of US monetary policy may answer the million dollar questions of investors and investors. More specifically, will the Fed back off the accelerator on aggressively raising rates and begin to reverse? FOMC/Powell’s hints of a pivot are likely to boost risk assets such as stocks and commodities. However, the Fed’s continued aggressive tone on US monetary policy would likely weigh on stocks, bonds and commodities. A Barron’s headline today reads: “Recession is a dark cloud hanging over Powell’s inflation-crushing Fed.”

The world’s stock markets fluctuated overnight. US stock indexes are heading for a mixed opening as the New York day session begins.

In overnight news, the Eurozone received weaker economic data, as its October manufacturing purchasing managers’ index (PMI) was 46.4, which was slightly below market expectations. A reading below 50.0 indicates a contraction in the industry.

Markets are still buzzing with unconfirmed reports that the Chinese government has set up a committee to end its zero-Covid policy. There has been no confirmation from Chinese government officials, and at least one senior official said he knew nothing about it.

In key external markets, the US dollar index is weakening today. The price of Nymex crude oil is moderately low and is trading around $88.00 per barrel. The US 10-year Treasury bond is 4.053%.

Other US economic data to be released on Wednesday include the weekly mortgage application survey, the ADP national employment report, the global manufacturing principal index and the weekly DOE liquid energy stockpile report.

Technically, the bears in gold futures still have a solid near-term technical advantage. The bulls’ next upside price objective is to produce a near-fixed resistance above $1,700.00. The Bears’ next near-term bearish objective is to drive futures prices below solid technical support at $1,600.00. First resistance is seen at $1,670.90 and then at last week’s high at $1,679.40. First support is seen at this week’s low at $1,633.60 and then at the October low at $1,621.10. Wyckoff’s market rating: 2.5

Live 24 hour silver chart [ Kitco Inc. ]

The silver bull has a general near-term technical advantage. Prices are in a variable upward trend in the daily bar chart. The silver bulls’ next upside price objective is to close above solid technical resistance at the October peak at $21.31. The next slow target for the bears is to close prices below the fixed support at $18.00. The first resistance is seen at this week’s high at $20.04 and then at $20.50. The next support is at $19.50 and then Tuesday’s low at $19.085. Wyckoff’s market rating: 5.5.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect his own Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; However, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. It is not a solicitation to make exchanges in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for any loss and/or damage arising from the use of this publication.

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