Gold Sees Modest Rally After FOMC Makes No Interest Rate Change

(Kitco News) - Gold prices were modestly higher in late U.S. trading Wednesday, and hit another four-week high, in the wake of a perceived “dovish” FOMC statement that left U.S. interest rates unchanged. The yellow metal is now closing in on the $1,300.00 level. August Comex gold was last up $6.50 an ounce at $1,294.80. July Comex silver was last up $0.131 at $17.57 an ounce.

This afternoon’s Federal Reserve’s Open Market Committee (FOMC) meeting concluded with a statement that left U.S. interest rates unchanged, but was deemed as leaning a bit toward the camp of easy-money policy doves. The marketplace was awaiting a post-FOMC press conference from Fed Chair Janet Yellen as of this writing. The recent very weak U.S. jobs report for May had most market watchers thinking the Fed  would not make an interest rate hike today, or even at the July FOMC meeting. The Bank of Japan and the European Central Bank also have monetary policy meetings this week.

The FOMC meeting this week is being overshadowed 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 has created uncertainty and anxiety in the marketplace—and is helping push world government bond market yields lower. The survivability of the European Union in its present form could depend on a “no” Brexit vote next week.

German government bonds fetched another record low yield Wednesday, with the 10-year bund auctioned for an average yield of 0.01%.

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Technically, August gold futures prices were nearer the session high and hit another four-week high today. The gold bulls have the solid overall near-term technical advantage and have upside momentum. Gold 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 pushing prices below solid technical support at last week’s low of $1,236.90. First resistance is seen at $1,300.00 and then at $1,308.00. First support is seen at today’s low of $1,281.30 and then at this week’s low of $1,275.20. Wyckoff’s Market Rating: 7.5

July silver futures prices closed nearer the session high and hit another four-week high today. The silver market bulls have the overall near-term technical advantage and have momentum. 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 the June low of $15.83. First resistance is seen at today’s high of $17.625 and then at $17.75. Next support is seen at today’s low of $17.355 and then at this week’s low of $17.105. Wyckoff's Market Rating: 7.0.

July N.Y. copper closed up 520 points at 209.20 cents today. Prices closed nearer the session high today and saw short covering in a bear market. 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 the June high of 214.50 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the January low of 195.80 cents. First resistance is seen at today’s high of 211.90 cents and then at 214.50 cents. First support is seen at today’s low of 203.85 cents and then at last week’s low of 201.30 cents. Wyckoff's Market Rating: 3.0.

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