Gold Prices See Tepid Bounce Ahead Of FOMC Minutes

(Kitco News) - Gold prices are slightly up in midday U.S. trading Wednesday. A lower U.S. stock market at mid-week provided a bit of support for the safe-haven metals today, as did some “Fed speak” overnight. June gold futures were last up $1.10 an ounce at $1,274.40. July Comex silver prices were last up $0.035 at $14.445 an ounce.

Traders were awaiting the early-afternoon release of the minutes of the last Federal Open Market Committee (FOMC) meeting held in April. Past FOMC minutes releases have moved markets to varying degrees.

St. Louis Federal Reserve Bank President James Bullard said in a speech in Hong Kong late Wednesday that the U.S. central bank may need to lower interest rates if inflation levels continue at very low levels. The Federal Reserve would like to see annual U.S. inflation around the 2% level. Bullard is a voting member of the Federal Open Market Committee (FOMC). This news is also friendly for the precious metals markets, which in recent years have seen their prices react positively to a more accommodative U.S. monetary policy.

In another sign of worldwide inflation that is very low, or even problematic, Germany’s government auctioned 10-year bonds (bunds) for an average yield of -0.07%. That’s the lowest yield in almost three years.

The key “outside markets” today see the U.S. dollar index slightly up and not far below this year’s high, which is a two-year high. Meantime, Nymex crude oil prices are sharply down and trading just above $61.00 a barrel. 

Technically, June gold futures prices closed near mid-range. The 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 $1,300.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the May low of $1,267.30. First resistance is seen at this week’s high of $1,278.80 and then at $1,287.00. First support is seen at this week’s low of $1,269.00 and then at $1,267.30. Wyckoff's Market Rating: 4.0

July silver futures closed prices closed nearer the session high on tepid short covering after hitting a 5.5-month low on Tuesday. The silver bears have the solid overall near-term technical advantage. A three-month-old downtrend is in place on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $15.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the November low of $14.175. First resistance is seen at $14.50 and then at $14.75. Next support is seen at this week’s low of $14.35 and then at $14.30. Wyckoff's Market Rating: 2.0.

July N.Y. copper closed down 365 points at 267.85 cents today. Prices closed nearer the session low and hit another 3.5-month low today. The copper bears have the firm overall near-term technical advantage. Prices are in a steep four-week-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 285.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the January low of 256.10 cents. First resistance is seen at 270.00 cents and then at today’s high of 271.90 cents. First support is seen at today’s low of 267.00 cents and then at 265.00 cents. Wyckoff's Market Rating: 3.0.