Gold, Silver See Tepid Bounces In Quiet, Pre-FOMC Trading

(Kitco News) - Gold and silver prices ended a quieter U.S. day session slightly up Monday. Both markets saw minor upside price corrections and short covering from the shorter-term futures traders after they hit multi-week lows last Friday. Precious metals bulls are still in technical trouble amid the recent downdrafts in prices. April Comex gold was last up $2.00 an ounce at $1,203.40. May Comex silver was last up $0.067 at $16.99 an ounce.

Focus of the world marketplace early this week is the two-day meeting of the Federal Reserve’s Open Market Committee (FOMC) that begins on Tuesday morning and ends Wednesday afternoon with a statement and a press conference from Fed Chair Janet Yellen. It’s widely expected the FOMC will raise U.S. interest rates by 0.25% at this week’s meeting. However, markets have already factored in the likely rate hike Wednesday, so keener focus will be on the Fed statement and Yellen’s comments at her press conference regarding the pace of U.S. interest rate increases in the coming months.

The key outside markets on Monday saw the U.S. dollar index trading slightly higher. The dollar index is still in a price uptrend and has benefitted recently on the likelihood of a U.S. interest rate hike coming this week. Nymex crude oil prices were weaker today and hit a 3.5-month low. The oil market is in a tailspin at present, which has somewhat dented worldwide investor and trader risk appetite, and has been a significantly bearish element for much of the raw commodity sector, including the precious metals markets.

Later this week voters in The Netherlands head to the polls. Traders and investors want to see how the anti-establishment candidate Geert Wilders fares with the voters, as a gauge for the upcoming French presidential election in May. Also later this week sees the Bank of England and Bank of Japan monetary policy meetings.

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Technically, April gold futures prices closed nearer the session low and saw tepid short covering following recent strong selling pressure. Prices last Friday hit a five-week low. The gold bears have the overall near-term technical advantage. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,227.40. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,182.60. First resistance is seen at today’s high of $1,210.90 and then at $1,217.50. First support is seen at $1,200.00 and then at last week’s low of $1,194.50. Wyckoff's Market Rating: 3.0

May silver futures prices closed near the session low today. Tepid short covering in a bear market was featured. The silver market bears still have the overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.57 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 today’s high of $17.16 and then at $17.31. Next support is seen at last week’s low of $16.855 and then at $16.70. Wyckoff's Market Rating: 3.0.

May N.Y. copper closed up 315 points at 262.65 cents today. Prices closed nearer the session high and saw short covering following recent selling pressure. The copper bulls and bears are on a level overall near-term technical playing field. Prices are in a three-week-old downtrend. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at last week’s high of 270.95 cents. The next downside price objective for the bears is closing prices below solid technical support at 250.00 cents. First resistance is seen at today’s high of 263.95 cents and then at 265.00 cents. First support is seen at today’s low of 259.70 and then at last week’s low of 255.85 cents. Wyckoff's Market Rating: 5.0.