Gold price slightly down as USDX, bond yields up; FOMC awaited

(Kitco News, Mon. Oct. 31st, 2022) – Gold and silver prices are slightly lower in early U.S. trading Monday. A higher U.S. dollar index and rising U.S. Treasury yields to start the trading week are putting mild pressure on the precious metals markets. December goldwas last down $2.10 at $1,642.70 and December silver was down $0.012 at $19.135.

Trading action in gold and silver may be more subdued until mid-week, as traders are looking ahead to the Federal Reserve’s Open Market Committee (FOMC) meeting that begins Tuesday morning and ends Wednesday afternoon with a statement and a press conference from Fed Chairman Jerome Powell. Most expect the FOMC to raise the Fed funds rate by another 0.75%. Traders and investors also want to see what comments the FOMC and Powell make regarding the future path of U.S. monetary policy—specifically, when the Fed will back off the accelerator on aggressively raising interest rates.

Global stock markets were flat to mixed overnight. U.S. stock indexes are headed for lower openings when the New York day session begins. Stock traders are exiting the historically rocky months of September and October with near-term price uptrends in place on the daily charts, including technically bullish weekly high closes last Friday.

The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are weaker and trading around $86.50 a barrel. The 10-year U.S. Treasury note is yielding 4.062%.

Is the Fed ready to slow down? Gold price is watching what Powell has to say

In overnight news, Euro zone inflation continues to run hot. The October consumer price index came in at up 10.7%, year-on-year, after a rise of 9.9% in September. The CPI was forecast at up 10% for October.

Russia over the weekend said it will suspend its agreement with Ukraine and the United Nations to allow Ukrainian grain to be exported from the war-torn country. Grain futures rallied on the news.

U.S. economic data due for release Monday includes the ISM Chicago business survey and the Texas manufacturing outlook survey.

Technically, the gold futures bears have the solid overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $1,700.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,600.00. First resistance is seen at $1,650.00 and then at Friday’s high of $1,670.90. First support is seen at the overnight low of $1,638.40 and then at the October low of $1,621.10. Wyckoff’s Market Rating: 2.0.

The silver bears have the overall near-term technical advantage. However, recent price action suggests a market bottom is in place. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the October high of $21.31. The next downside price objective for the bears is closing prices below solid support at the September low of $17.40. First resistance is seen at $19.50 and then at last week’s high of $19.765. Next support is seen at today’s low of $18.935 and then at $18.74.

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com