Gold Firmer But Off Daily Highs, In Wake of FOMC Statement

(Kitco News) - Gold prices were modestly higher in early afternoon U.S. trading Wednesday, following the much-anticipated FOMC statement that was deemed mostly neutral. The precious metals markets drew support during the session from bullish outside markets that included higher crude oil prices and a lower U.S. dollar index. June Comex gold was last up $3.00 at $1,246.00 an ounce. July Comex silver was last up $0.051 at $17.21 an ounce.

Traders and investors are digesting the results of the meeting of the U.S. Federal Open Market Committee (FOMC) that began Tuesday morning and ended early Wednesday afternoon with a statement. There were no changes in U.S. monetary policy, as expected. 
And the statement provided just scant clues that would favor the dovish or hawkish monetary policy camps.

The Bank of Japan holds its regular monetary policy meeting on Thursday. The BOJ is battling slow economic growth, price deflation and an appreciating yen on the world foreign exchange market. Many view the BOJ meeting this week as just as market-sensitive as the just-concluded FOMC meeting.

Nymex crude oil prices were solidly higher and hit a nearly five-month high Wednessday. Nymex crude is hovering around $45.00 a barrel. The other key “outside market” saw the U.S. dollar index slightly lower in afternoon trading and still mired in a near-term price downtrend.

World stock markets were subdued and did not stray too far from steady levels Wednesday. U.S. stock indexes were weaker after disappointing earnings results from Twitter and Apple late Tuesday.

Technically, June gold futures bulls have the 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 April high of $1,272.40. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at 1,225.00. First resistance is seen at $1,260.00 and then at $1,264.70. First support is seen at today’s low of $1,245.70 and then at $1,240.00. Wyckoff’s Market Rating: 6.5

July silver futures prices closed near mid-range today. The silver market bulls have the firm overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $18.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.50. First resistance is seen at today’s high of $17.48 and then at the April high of $17.77. Next support is seen at $17.00 and then at $16.80. Wyckoff's Market Rating: 7.5.

July N.Y. copper closed down 145 points at 223.20 cents today. Prices closed near mid-range and saw more profit taking. The copper bulls and bears are back on a level overall near-term technical playing field. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the April high of 230.55 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the April low of 214.00 cents. First resistance is seen at 225.00 and then at this week’s high of 227.25 cents. First support is seen at today’s low of 220.10 cents and then at 218.00 cents. Wyckoff's Market Rating: 5.0.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com