Gold Near Steady In Choppy, 2-Sided Trade; FOMC Results Awaited

(Kitco News) - Gold was ending the U.S. day session near steady Tuesday, in a choppy trading affair that saw prices visit both sides of unchanged. There was some safe haven demand amid growing concerns about the U.K. “Brexit” vote next week, and ahead of the FOMC meeting. However, bearish outside markets today—a firmer U.S. dollar index and lower crude oil prices—prompted some selling in the precious metals markets. August Comex gold was last down $1.20 at $1,285.70. July Comex silver was last down $0.073 at $17.38 an ounce.

World stock markets were mostly weaker again Tuesday, amid “risk-off” trader and investor attitudes. World government bond markets have been in keener focus the past couple weeks, as yields are declining. Increased money flows into world bond markets have hit world stock markets. The German 10-year bund yield fell below zero percent for the first time in history Tuesday. U.S. Treasury bond and note yields are also falling, on safe-haven demand. U.S. stock indexes are pointed toward lower openings when the day session begins in New York City.

Market watchers are looking forward to the end result of this week’s meeting of the Federal Reserve’s Open Market Committee (FOMC), which began Tuesday morning and ends Wednesday afternoon. There is not a real clear consensus on whether the Fed will raise interest rates at this meeting. However, the recent very weak U.S. jobs report for May has most market watchers speculating the Fed will not make a rate hike in June. The Bank of Japan and the European Central Bank also have monetary policy meetings later this week.

The FOMC meeting this week is arguably being trumped by concerns about next week’s U.K. vote on whether that country stays in the European Union. Recent U.K. polls show the vote could go either way, which is creating uncertainty and anxiety in the marketplace. The survivability of the European Union in its present form could depend on a “no” Brexit vote next week.

U.S. economic data released Tuesday included retail sales, import and export prices, and manufacturing and trade inventories. The data was a mixed bag and had little impact on precious metals prices.

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Technically, August gold futures bulls have the firm overall near-term technical advantage. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the May high of $1,308.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at last week’s low of $1,236.90. First resistance is seen at Monday’s high of $1,290.30 and then at $1,300.00. First support is seen at Tuesday’s low of $1,278.60 and then at Monday’s low of 1,275.20. Wyckoff’s Market Rating: 7.5

July silver bulls have the overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing futures 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 the June low of $15.83. First resistance is at $17.50 and then at $17.75. Next support is seen at Monday’s low of $17.105 and then at $17.00. Wyckoff's Market Rating: 6.5.

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