Gold Sees Moderate Selling Pressure After FOMC Minutes Suggest June Rake Hike

(Kitco News) - Gold prices are moderately lower in afternoon U.S. trading Tuesday, pressured by just-released FOMC minutes that were deemed to favor the hawkish camp on U.S. monetary policy. A higher U.S. dollar index on this day was also a bearish element for the precious metals markets. June Comex gold futures were last down $9.30 an ounce at $1,267.60. July Comex silver was last down $0.200 at $17.05 an ounce.

The minutes of the latest Federal Open Market Committee (FOMC) meeting said FOMC members will raise U.S. interest rates in June if second-quarter U.S. economic growth continues on a sound track, which is what the FOMC expects to happen. Thus, unless there is some seriously downbeat economic data released in the next few weeks, there will be another Fed rate hike in June.

U.S. stock indexes turned negative in the aftermath of the FOMC minutes, while the U.S. dollar index rallied. U.S. Treasuries sold off on the FOMC minutes.

World stock markets were mostly weaker overnight, partly on continued worries about the health of China’s economy, which is the world’s second-largest. There was also continuing trepidation regarding the future path of U.S. monetary policy.

In other news, the Euro zone got some more dour news on the deflation front Tuesday.  Consumer price inflation in April was down 0.2%, year-on-year, and unchanged month-on-month.

Technically, June gold futures closed near mid-range. The 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 May of $1,306.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at 1,250.00. First resistance is seen at today’s high of $1,283.50 and then at this week’s high of $1,290.40. First support is seen at the May low of $1,258.50 and then at 1,250.00. Wyckoff’s Market Rating: 7.0

July silver futures prices closed near mid-range today. The silver market bulls have the overall near-term technical advantage, but have faded as a near-term downtrend is in place on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the May high of $18.06 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 this week’s high of $17.43 and then at $17.77. Next support is the May low of $16.85 and then at $16.50. Wyckoff's Market Rating: 6.5.

July N.Y. copper closed down 100 points at 207.90 cents today. Prices closed nearer the session low and hit a three-month low today. The copper bears have the firm overall near-term technical advantage. 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 this week’s high of 211.15 cents and then at 214.00 cents. First support is seen at today’s low of 204.80 cents and then at 202.00 cents. Wyckoff's Market Rating: 2.5.

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