Gold prices give up some overnight gains on strong U.S. data; FOMC decision on deck

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Oct 30, 2019 11:09 NY TimeKitco 10AM Silver Fix

Silver	17.81	+0.03
Platinum	914.00	-4.00
Palladium	1780.00	+18.00
Rhodium	4940.00	0.00

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( Kitco, Wed. Oct. 30th, 2019 ) – Gold prices are modestly up in early U.S. trading Wednesday, but have given up much of the moderate gains seen overnight. Some stronger-than-expected U.S. economic data just released is putting some pressure on the precious metals. December gold futureswere last up $2.20 an ounce at 1,492.90. December Comex silver prices were last up $0.009 at $17.845 an ounce. 

The just-released first estimate of third-quarter U.S. gross domestic product came in at up 1.9% versus the consensus forecast of up 1.6%, on an annual basis.

Also, the October U.S. ADP national employment report came out with a gain of 125,000 jobs. The report was expected to show a rise of 100,000 jobs in October. Gold and silver prices down-ticked these reports. 

Both of these reports fall into the camp of the U.S. monetary policy hawks, who do not want to see interest rates drop any more.

Now, focus of traders and investors quickly turns to the Federal Reserve’s Open Market Committee (FOMC) meeting that began Tuesday morning and ends Wednesday afternoon with a statement. It’s widely expected the Fed will cut interest rates by 0.25%. What is not so clear is the glide path the Fed will issue on future monetary policy moves in this afternoon’s statement and the follow-up press conference from Fed Chairman Jerome Powell. Look for active trading in the markets, including the metals, in afternoon trading Wednesday following the FOMC statement.

Asian and European stock indexes were mostly weaker in trading overnight. U.S. stock indexes are pointed toward steady to slightly lower openings when the New York day session begins. 

In overnight news, the Euro zone issued its October economic sentiment indicator and it came in at the lowest level in 4.5 years.

The key “outside markets” find Nymex crude oilprices near steady in early U.S. trading today and trading around $55.50 a barrel. Meantime, the U.S. dollar index is slightly lower.  

Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey and the weekly DOE liquid energy stocks report.

Technically, the gold bulls have the overall near-term technical advantage but are fading this week. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $1,525.00. Bears’ next near-term downside price breakout objective is pushing December futures prices below solid technical support at the October low of $1,465.00. First resistance is seen at the overnight high of $1,497.10 and then at $1,500.00. First support is seen at the overnight low of $1,486.50 and then at $1,478.00.

December silver futures bulls have the overall near-term technical advantage. Prices have been trending higher for four weeks. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $18.35 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at last week’s low of $17.44. First resistance is seen at the overnight high of $17.875 and then at $18.00. Next support is seen at the overnight low of $17.605 and then at $17.50.

Posted by :
Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com