Gold Boosted By No Rate Hike From FOMC

(Kitco News) - Gold and silver price were trading solidly higher in afternoon U.S. trading Wednesday, following bullishly construed conclusions to Bank of Japan and U.S. Federal Reserve monetary policy meetings. December Comex gold was last up $20.80 an ounce at $1,338.70. December Comex silver was last up $0.628 at $19.90 an ounce.

The two-day meeting of the Federal Reserve’s Open Market Committee (FOMC) ended Wednesday afternoon with the Fed announcing no change in interest rates. The Fed said the U.S. economy continues on a growth path but business investment remains weak. Most market watchers did not think the Fed would raise interest rates today. Today’s FOMC statement was seen as favoring the dovish camp on monetary policy. As of this writing traders and investors were awaiting Fed chair Janet Yellen’s quarterly press conference held in conjunction with the FOMC meeting.

Earlier today, the Bank of Japan kept its negative interest rates unchanged following its regular monetary policy meeting Wednesday. However, the BOJ said it is now targeting its 10-year government bond, wanting to keep its yield at zero, and it said it will continue buying as many government bonds as necessary (quantitative easing). The marketplace read this news as monetary-policy dovish, although not aggressive, and world stock and commodity markets were supported on the news. The marketplace had mixed ideas on whether the BOJ would keep policy unchanged or initiate new stimulus.

The key “outside markets” were bullish for the precious metals Wednesday. Nymex crude oil prices were higher on short covering after hitting a six-week low Tuesday. However, crude oil prices remain in a near-term downtrend. The other outside market on saw the U.S. dollar index trading lower, amid recent choppy trading action on the charts.

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Technically, December gold futures prices were near the session high and scored a bullish “outside day” up on the daily bar chart today. The gold bulls have the overall near-term technical advantage, as prices are not that far below this year’s high. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the September high of $1,357.60. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,300.00. First resistance is seen at $1,340.00 and then at $1,350.00. First support is seen at $1,325.00 and then at $1,318.50. Wyckoff’s Market Rating: 6.0

December silver futures prices closed nearer the session high and scored a bullish “outside day” up on the daily bar chart. The silver market bulls have the overall near-term technical advantage and gained upside momentum today. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the September high of $20.235 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the August low of $18.46. First resistance is seen at $20.00 and then at $20.235. Next support is seen at $19.50 and then at $19.25. Wyckoff's Market Rating: 6.5.

December N.Y. copper closed down 70 points at 215.80 cents today. Prices closed nearer the session low today. The copper bulls and bears are 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 225.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at this week’s low of 206.40 cents. First resistance is seen at this week’s high of 217.25 cents and then at 220.00 cents. First support is seen at today’s low of $2.1505 and then at this week’s low of 213.90 cents. Wyckoff's Market Rating: 5.0.

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