Gold price firmer as Fed rate decision on deck

(Kitco News, Thurs. Nov. 7th, 2024) – Gold and silver prices are firmer in early U.S. trading, on a corrective rebound following strong losses posted Wednesday, in the wake of the decisive win by U.S. presidential candidate Donald Trump that injected risk appetite back into the general marketplace. A lower U.S. dollar index today is also a friendly daily outside-market element for the precious metals. December gold was last up $12.30 at $2,668.60 and December silver was up $0.199 at $31.53.

Overshadowed by the U.S. elections but on tap this week is the FOMC meeting of the Federal Reserve that started Wednesday morning and ends Thursday afternoon with the FOMC statement and press conference from Fed Chair Powell. Most believe the Fed will cut its main interest rate by 0.25%.

The Bank of England met today and cut its main interest rate by 0.25%, as expected. Sweden’s Riksbank lowered its main rate by half a point.

Bloomberg today reported: “Central bankers the world over are worried about Trump’s policies and how they could lead to slower global economic growth and higher inflation. His win increases uncertainties in Japan for instance, potentially leading to a near-term rate hike there.”

Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed to firmer openings when the New York day session begins, with the S&P 500 hitting another record high. The U.S. stock market has rallied strongly on the decisive victory by Donald Trump in the U.S. presidential race.

The key outside markets today see the U.S. dollar index lower. Nymex crude oil futures prices are lower and trading around $71.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.437%.

Other U.S. economic data due for release Thursday includes the weekly jobless claims report, preliminary productivity and costs, monthly wholesale trade, consumer credit and the monthly chain store sales index.

Technically, December gold bulls still have the overall near-term technical advantage but have faded. Bulls’ next upside price objective is to produce a close above solid resistance at the record high of $2,801.80. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the October low of $2,618.80. First resistance is seen at $2,700.00 and then at $2,708.70. First support is seen at $2,675.00 and then at today’s low of $2,650.30.