Gold Sees Modest Gains In Wake Of Mildly Dovish FOMC Statement

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(Kitco News) - Gold prices were trading slightly lower in afternoon trading Wednesday. The just-released FOMC statement is being termed just a bit dovish, but most markets did not show a big reaction to the news. August Comex gold was last down $1.80 an ounce at $1,250.30. September Comex silver was last down $0.067 at $16.475 an ounce.

The Federal Reserve’s Open Market Committee meeting (FOMC) ended early this afternoon with a statement that did not change interest rates or U.S. monetary policy. That was expected. The statement did say the Fed is looking to soon change its policy on its big balance sheet of U.S. securities. That suggests the Fed wants to shrink it sooner rather than later. Still, the marketplace did not perceive the Fed statement to be leaning toward the hawkish side of U.S. monetary policy. Recently Federal Reserve Chair Janet Yellen has sounded a more dovish tone on U.S. monetary policy. Still, many Fed watchers are looking for the U.S. central bank to raise interest rates at least one more time this year.

The U.S. dollar index weakened slightly after the FOMC statement, and that did give gold a slight lift. The other “outside market” on Wednesday saw Nymex crude oil futures firmer and hitting a six-week high. The oil market is in a near-term uptrend.

Technically, August gold futures prices were near the session high in late trading. The gold bulls have the slight overall near-term technical advantage. Prices are in a two-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 $1,270.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,220.00. First resistance is seen at this week’s high of $1,259.00 and then at $1,270.00. First support is seen at today’s low of $1,243.20 and then at $1,240.00. Wyckoff's Market Rating: 5.5

September silver futures prices were near the session high in late trading. While the silver bears still have the overall near-term technical advantage recent price action suggests a near-term market bottom is in place. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the July low of $15.145. First resistance is seen at this week’s high of $16.605 and then at $16.75. Next support is seen at this week’s low of $16.225 and then at $16.00. Wyckoff's Market Rating: 3.0.

September N.Y. copper closed up 190 points at 286.55 cents today. Prices closed near mid-range today and hit another two-year high. The copper bulls have the solid overall near-term technical advantage. Prices are in a 2.5-month-old uptrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 300.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 270.00 cents. First resistance is seen at today’s high of 290.55 cents and then at 292.50 cents. First support is seen at today’s low of 283.20 cents and then at 280.00 cents. Wyckoff's Market Rating: 8.0.

By Jim Wyckoff

For Kitco News

 jwyckoff@kitco.com