(Kitco News) - Gold prices moved from modestly lower to modestly higher in the wake of a mildly dovish FOMC statement issued early Wednesday afternoon. Price action earlier in the day saw a mild downside technical correction following recent gains. The safe-haven metal still has some worldwide trader and investor anxiety working in its favor. Also, the gold bulls still have technical momentum on their side. February Comex gold was last up $1.00 at $1,121.00 an ounce. March Comex silver was last down $0.074 at $14.48 an ounce.
The Federal Open Market Committee (FOMC) two-day meeting ended Wednesday afternoon with no change in U.S. interest rates. No change was expected. The FOMC statement, however, was deemed a bit dovish. The statement intimated that the risks to the U.S. economy are no longer in balance due to recent financial and stock market instability. However, the statement did not say outright that Fed members are worried about the recent world stock market sell-offs. Other market watchers just called the statement confusing, or neutral. Still, the gold market got a lift, the U.S. dollar index and stock indexes sold off, and U.S. Treasuries saw their yields drop.
All eyes remain on the crude oil market, and prices were near steady in afternoon action after trading both sides of unchanged earlier. The weaker oil prices overnight put pressure on most world stock markets. European stock indexes were mostly lower. China’s Shanghai stock index was down 0.5%, while Japan’s Nikkei stock index was up 2.7%.
Technically, February gold futures prices were near the session high and hit another nearly three-month high this afternoon. While the gold bears still have the overall near-term technical advantage, prices are in a choppy five-week-old uptrend and the bulls have technical momentum on their side. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,150.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at 1,092.50. First resistance is seen at $1,125.00 and then at $1,130.00. First support is seen at today’s low of $1,114.90 and then at $1,110.00. Wyckoff’s Market Rating: 4.0
March silver futures prices were nearer the session high. Prices Tuesday hit a six-week high. The silver market bears still have the overall near-term technical advantage. However, this week’s price action could be the beginning of a bullish upside “breakout” from the sideways trading action the past several weeks that could have been “basing” that would precede a market bottom being in place. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $15.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.00. First resistance is seen at the December high of $14.64 and then at $14.75. Next support is seen at today’s low of $14.436 and then at Tuesday’s low of $14.22. Wyckoff's Market Rating: 3.0.
March N.Y. copper closed up 200 points at 205.70 cents today. Prices closed near mid-range and hit a three-week high today, on short covering. The key “outside markets” were bullish for copper today as the U.S. dollar index was weaker and crude oil prices were higher. The copper bears still have the overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 215.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the contract low of 193.55 cents. First resistance is seen at today’s high of 207.55 cents and then at 210.00 cents. First support is seen at today’s low of 203.10 cents and then at 200.00 cents. Wyckoff's Market Rating: 2.5.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff
