Gold Sees Some Profit Taking; Not Much Reaction To FOMC Minutes

(Kitco News) - Gold prices were modestly lower in late U.S. trading Wednesday.  The just-released FOMC minutes said the Fed should probably raise interest rates soon, but that was not unexpected given recent more hawkish comments from Federal Reserve officials. The gold market bulls are impressed by the yellow metal’s resilience this week, in the face of solid gains in the U.S. dollar index and growing notions of an imminent U.S. interest rate rise. April Comex gold was last down $1.90 an ounce at $1,237.00. March Comex silver was last down $0.031 at $17.97 an ounce.

Arguably the most important economic event for the world marketplace this week saw this afternoon’s Federal Reserve’s Open Market Committee (FOMC) minutes show most FOMC members want the Fed to raise interest rates sooner rather than later. The members also mentioned rising inflationary pressures, although they are not yet problematic. Many now think a U.S. rate hike in March could come from the FOMC.

In overnight news, the Euro zone’s consumer price index was up 1.8% in January, year-on-year, following a 1.1% rise in December. The January rate is close to the 2.0% annual inflation rate the European Central Bank wants to see. Indeed, the major economies of the world are starting to see rising inflation.

The key “outside markets” on Wednesday saw the U.S. dollar index trading firmer again. The greenback bulls have momentum and the overall near-term technical advantage amid a fledgling price uptrend on the daily chart. Meantime, Nymex crude oil futures prices were lower today on a corrective pullback after hitting a six-week high on Tuesday. Oil prices are in a sideways trading range that has bound the market for weeks.

Technically, April gold futures closed prices closed nearer the session low on profit taking. The gold bulls still have the overall near-term technical advantage. Prices are in a nine-week-old uptrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,275.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,210.00. First resistance is seen at the today’s high of $1,241.90 and then at the February high of $1,246.60. First support is seen at this week’s low of $1,226.80 and then at $1,220.00. Wyckoff's Market Rating: 6.0

March silver futures prices closed near mid-range today. The silver market bulls have the overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $18.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.00. First resistance is seen at last week’s high of $18.14 and then at $18.25. Next support is seen at this week’s low of $17.815 and then at this week’s low of $17.73. Wyckoff's Market Rating: 6.0.

March N.Y. copper closed down 130 points at 273.25 cents today. Prices closed near mid-range. The copper bulls have the firm overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 290.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 260.00 cents. First resistance is seen at this week’s high of 275.85 cents and then at the February high of 282.30 cents. First support is seen at this week’s low of 270.00 and then at last week’s low of 267.80 cents. Wyckoff's Market Rating: 7.0.

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