Gold, silver see strong rebounds from Wednesday's sell off

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(Kitco News) - Gold and silver prices onThursday recovered all of Wednesday"s sharp losses. It appears metals traders werepreparing for a hawkish FOMC statement and tone from Fed Chairman Jerome PowellWednesday afternoon, but then after the fact reckoned the Fed may not beleaning as hawkish on U.S. monetary policy as many expected. Also, it appearsto be a classic case of “sell the rumor, buy the fact” from the shorter-termfutures traders, regarding the Fed monetary policy tightening. December goldwas last up $29.40 at $1,793.30 and December Comex silver was last up $0.699 at$23.935 an ounce.

TheFOMC meeting that ended Wednesday afternoon saw the Fed announce its taperingof monthly bond buying, as expected. It"s expected the tapering will wind downnext June. There were no big surprises in the FOMC statement or Fed ChairPowell"s press conference, which suggested the marketplace had pretty welldialed in the outcome. Powell did suggest that U.S. interest rate hikes do notnecessarily have to come after tapering winds down--and that leaned a littledovish and may have helped lift gold prices.

Theregular monetary policy meeting of the Bank of England saw the BOE leave itsmonetary policy unchanged. However, the BOE has hinted recently that itsmonetary policy will also start to tighten due to inflationary pressures.

Speakingof inflation, it"s running hotter in the Euro zone. The zone"s Septemberproducer price index was reported up 2.7% from August and up a whopping 16.0%,year-on-year.

Globalstock markets were mixed to mostly firmer in overnight trading. The U.S. stockindexes are mixed at midday. The U.S. indexes hit record highs today.

Tradersare awaiting Friday"s important U.S. employment situation report for October.The key non-farm payrolls component of that report is expected to rise 450,000compared to a rise of 194,000 in the September report.

Thekey outside markets today see the U.S. dollar index solidly higher. Nymex crudeoil prices are lower and trading around $80.25 a barrel. Meantime, the 10-yearU.S. Treasury note yield is presently fetching 1.57%.

Technically,December gold futures bulls have the slight overall near-term technicaladvantage. Bulls" next upside price objective is to produce a close above solidresistance at the October high of $1,815.50. Bears' next near-term downsideprice objective is pushing futures prices below solid technical support at theSeptember low of $1,721.10. First resistance is seen at $1,800.00 and then at$1,815.50. First support is seen at $1,780.00 and then at today"s low of$1,769.30. Wyckoff's Market Rating: 5.5

December silver futures bears have the slightoverall near-term technical advantage. Silver bulls' next upside priceobjective is closing prices above solid technical resistance at $25.00 anounce. The next downside price objective for the bears is closing prices below solidsupport at $22.00. First resistance is seen at this week"s high of $24.175 andthen at $24.50. Next support is seen at today"s low of $23.485 and then at thisweek"s low of $23.045. Wyckoff's Market Rating: 4.5.

DecemberN.Y. copper closed up 70 points at 432.90 cents today. Prices closed nearer thesession low today and hit a three-week low. The copper bulls and bears are on alevel overall near-term technical playing field. Copper bulls' next upsideprice objective is pushing and closing prices above solid technical resistanceat 455.00 cents. The next downside price objective for the bears is closingprices below solid technical support at 410.00 cents. First resistance is seenat today"s high of 440.40 cents and then at this week"s high of 445.05 cents.First support is seen at today"s low of 427.80 cents and then at 425.00 cents.Wyckoff's Market Rating: 5.0.

By Jim Wyckoff

For Kitco News

Follow @jimwyckoffjwyckoff@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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