(Kitco News) - Gold prices Thursday extended Wednesday afternoon’s sharp gains, in the wake of a dovish FOMC statement. A sharp drop in the U.S. dollar index to a five-month low and crude oil prices pushing above $40.00 a barrel Thursday also worked in favor of the precious metals market bulls. April Comex gold was last up $37.50 at $1,267.50 an ounce. May Comex silver was last up $0.501 at $15.72 an ounce.
The marketplace Thursday was still digesting the U.S. Federal Reserve’s Open Market Committee (FOMC) meeting that ended Wednesday afternoon with a statement that fell firmly into the camp of the monetary policy doves. While the Fed did not make a policy move this week, as expected, it implied the U.S. central bank would only raise interest rates twice this year—down from the three or four rate hikes that many Fed watchers were expecting this year. The FOMC also downgraded its assessment of U.S. economic growth prospects.
Crude oil prices were solidly higher and hit a 2.5-month high Thursday, on reports major world oil producers from OPEC and Russia will meet on April 17 to discuss production limits. The up-trending crude oil market and slumping U.S. dollar index are bullish for the raw commodity sector, and do further suggest the “bust cycle” in the sector has ended.
U.S. economic data released Thursday had little significant impact on the precious metals markets.
Technically, April gold futures prices closed nearer the session high. Gold bulls have the firm overall near-term technical advantage. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the March high of $1,287.80. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at this week’s low of 1,226.00. First resistance is seen at today’s high of $1,271.90 and then at $1,280.70. First support is seen at today’s low of $1,255.20 and then at $1,250.00. Wyckoff’s Market Rating: 7.0
May silver futures prices closed nearer the session high and hit a four-month high today. The silver market bulls today gained the overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the October high of $16.372 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.165. First resistance is seen at today’s high of $16.075 and then at $16.25. Next support is seen at $15.85 and then at today’s low of $15.565. Wyckoff's Market Rating: 6.0.
May N.Y. copper closed up 575 points at 229.15 cents today. Prices closed nearer the session high and closed at a 4.5-month high close today. The copper bulls have the overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 240.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the 215.00 cents. First resistance is seen at the March high of 2.3040 cents and then at 232.50 cents. First support is seen at today’s low of 225.20 cents and then at 222.30 cents. Wyckoff's Market Rating: 6.0.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff
