Modest price pressure on gold ahead of FOMC conclusion

(Kitco News, Wed. Jan. 26th, 2022) – Gold futures prices are a bit weaker in early U.S. trading Wednesday, on positioning ahead of the U.S. data point of the week: the Federal Reserve’s Open Market Committee (FOMC) meeting that ends Wednesday afternoon with a statement and press conference from Fed Chairman Jerome Powell. It’s expected the Fed will lay the groundwork to raise U.S. interest rates at its March FOMC meeting. Many market watchers believe the Fed will do up to five U.S. interest rate increases this year. As evidenced by the recent stock market volatility, the marketplace appears to be getting more anxious regarding how the Fed in the coming months is going to deal with rising and even problematic price inflation. February gold futures were last down $5.30 at $1,847.10 and March Comex silver was last up $0.079 at $23.975 an ounce.

Global stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins. The major U.S. indexes hit seven-month lows on Monday. Serious near-term technical damage has been inflicted upon the U.S. stock indexes, to suggest they have at put in near-term market tops.

Still on the front-burner of the marketplace is Russia poised to invade Ukraine. NATO allies are responding by sending arms to Ukraine and putting NATO troops on higher alert, including 8,500 U.S. troops. It appears that Russian President Putin has painted himself into a corner on this matter, which means the ending is unlikely to be diplomatic. President Biden knows this, and one has to wonder if Biden will craft a plan to get Putin to stand down his army while at the same time having him save face.

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The key outside markets today see crude oil prices firmer and trading around $86.50 a barrel. The U.S. dollar index is a bit higher early today. The U.S. Treasury 10-year note yield is presently fetching 1.785%.

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

Technically, the February gold futures bulls have the firm overall near-term technical advantage amid a five-week-old price uptrend in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at the November high of $1,881.90. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at this week’s high of $1,854.20 and then at $1,865.00. First support is seen at Tuesday’s low of $1,834.40 and then at this week’s low of $1,829.30.

March silver futures bulls have the overall near-term technical advantage. Prices are in a five-week-old uptrend on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the November high of $25.54 an ounce. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at Tuesday’s high of $24.045 and then at this week’s high of $24.36. Next support is seen at this week’s low of $23.595 and then at $23.48.

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com