(Kitco News) - Gold prices ended the U.S. day session slightly lower in quieter, two-sided trading Tuesday. The feature in gold and silver markets was position evening ahead of the highly anticipated conclusion to the FOMC meeting Wednesday afternoon. February Comex gold was last down $2.00 at $1,061.40 an ounce. March Comex silver was last up $0.05 at $13.745 an ounce.
The U.S. Federal Reserve’s Open Market Committee (FOMC) meeting began this morning and ends early Wednesday afternoon with a statement. The marketplace fully expects the FOMC to raise the U.S. fed funds rate from the present level of zero, to 0.25%. What will be closely watched is the Fed’s language in the statement and Fed Chair Janet Yellen’s press conference right after the meeting that could provide clues on the pace of future interest rate increases.
The U.S. consumer price index for November was reported today and it came in at up 0.5%, year-on-year, but the core reading was up 2.0% for the same period. The core number excludes food and energy. Both readings were a bit higher than expected but not deemed problematic for inflation. Still, the gold and silver market prices got a slight lift after the data was released. However, those tepid gains could not be held as the trading session progressed.
Nymex crude oil futures prices rallied on short covering today and are well up from Monday’s nearly seven-year low of $34.53 a barrel. Monday’s losses in crude put prices close to the 2009 low of $33.20 a barrel, which is the mark many are focusing on crude reaching before bottoming out. If crude prices close out the week at or near the weekly high on Friday, then that would be a good clue crude oil prices have put in at least a near-term bottom. That would also be very good news for the raw commodity sector, which has in recent weeks felt the pressure of a slumping worldwide crude oil market.
The other key “outside market” was the U.S. dollar index post a solid rebound during the U.S. day session after hitting a six-week low overnight.
Technically, February gold futures prices closed near mid-range. Gold bears have the solid overall near-term technical advantage. There are no early clues of a market bottom being close at hand. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the December high of $1,088.30. Bears' next near-term downside price breakout objective is pushing prices below solid longer-term technical support at the contract low of 1,045.40. First resistance is seen at today’s high of $1,067.90 and then at this week’s high of $1,077.30. First support is seen at today’s low of $1,057.40 and then at $1,050.00. Wyckoff’s Market Rating: 1.5
March silver futures prices closed nearer the session high on tepid short covering after hitting a contract and six-year low Monday. The silver market bears still have the solid overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the December high of $14.64 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $13.00. First resistance is seen at $14.00 and then at $14.25. Next support is seen at Monday’s contract low of $13.62 and then at $13.50. Wyckoff's Market Rating: 1.0.
March N.Y. copper closed down 530 points at 205.95 cents today. Prices closed nearer the session low. Copper bears have the solid overall near-term technical advantage and gained fresh power today. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 220.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 200.00 cents. First resistance is seen at 210.00 cents and then at last week’s high of 213.85 cents. First support is seen at today’s low of 204.80 cents and then at the December low of 202.55 cents. Wyckoff's Market Rating: 1.5.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff
