Gold, silver tread water ahead of FOMC minutes

(Kitco News,Aug.16th,2023) – Gold and silver prices are not straying too far from unchanged levels in quieter U.S. trading Wednesday. Traders are awaiting this afternoon’s release of the minutes from the last meeting of the Federal Reserve’s Open Market Committee (FOMC). Both markets hit five-month lows Tuesday. December gold was last down $0.50 at $1,934.60 and September silver was down $0.01 at $22.64.

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There is a growing group of economists and market watchers that argue the string of Federal Reserve interest rate increases has successfully tamped down price inflation to the point that no further rate hikes are necessary. Today’s FOMC minutes may or may not provide fresh clues on the monetary policy bent of the U.S. central bank.

Goldman Sachs economists are forecasting the Fed will hold steady on its monetary policy until the second quarter of 2024, when at that time they expect the Fed to make an interest rate cut. This scenario bodes well for increased global economic growth and for higher raw commodity prices due to better demand. A stronger U.S. retail sales report issued this week did throw a bit of cold water on this group’s notions of a halt in Fed rate hikes. Next week’s Federal Reserve annual symposium at Jackson Hole, Wyoming may also shed more light on the U.S. central bank’s monetary policy intentions in the coming months.

Asian and European stock markets were mixed to weaker in overnight trading. U.S. stock indexes are firmer near midday. Trader and investor attitudes remain a bit more risk averse at mid-week.

Focus is also on China’s economy. In China, the new property prices decline accelerated in July, highlighting ongoing challenges in one of the top sectors of the world’s second-largest economy. Also, Zhongrong International Trust has at least 30 products that are now overdue and Zhongrong also halted redemptions on some short-term instruments, according to Bloomberg. Reports said the company doesn’t have an immediate plan to cover the payments since its short-term liquidity has suddenly dried up. Zhongrong is among the biggest firms in China. A Wall Street Journal story today has a headline: “China struggles to halt economic slide.”

The key outside markets today see the U.S. dollar index slightly weaker. Nymex crude oil prices are near steady trading around $81.00 a barrel. Worries about demand, amid the dour economic news coming out of China this week, has hit the crude oil market this week. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching around 4.2%.

Gold Price in US Dollars

Technically, December gold futures prices hit a five-month low Tuesday. Bears have the firm overall near-term technical advantage. Prices are in a three-week-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,980.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at $1,950.00 and then at $1,963.50. First support is seen at this week’s low of $1,927.50 and then at $1,915.00. Wyckoff’s Market Rating: 3.5.

September silver futures prices hit a five-month low Tuesday. The silver bears have the firm overall near-term technical advantage. Prices are in a three-week-old downtrend on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $24.00. The next downside price objective for the bears is closing prices below solid support at $21.00. First resistance is seen at today’s high of $22.855 and then at $23.00. Next support is seen at this week’s low of $22.265 and then at $22.00.

September N.Y. copper closed down 60 points at 366.15 cents today. Prices closed nearer the session low and hit a 2.5-month low. The copper bears have the firm overall near-term technical advantage. Prices are in a fledgling downtrend on the daily bar chart. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at the July high of 402.40 cents. The next downside price objective for the bears is closing prices below solid technical support at the May low of 356.50 cents. First resistance is seen at today’s high of 369.40 cents and then at this week’s high of 374.90 cents. First support is seen at today’s low of 364.55 cents and then at 360.00 cents.

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com