Gold Slips A Little On Slightly Hawkish FOMC Statement

(Kitco News) - Gold pricesareslightly lower in afternoon U.S. trading Wednesday, and lost mild earlier gainsin the wake of today’s FOMC meeting statement that saw the Fed U.S. raiseinterest rates slightly. August Comex gold futures were last down $0.30 anounce at $1,299.90. July Comex silver was last up $0.009 at $16.90 an ounce.

TheFederal Reserve’s Open Market Committee (FOMC) meeting concluded Wednesdayafternoon with the Fed raising U.S. interest rates by 0.25%, to a range of1.75% to 2.0%. The rate hike was fully expected. The FOMC members alsoindicated the stronger U.S. economy now warrants a total of four interest rateincreases this year. Many in the marketplace had reckoned the Fed would onlymake three rate increases in 2018. That element of the statement was just a bitof a surprise and deemed slightly hawkish. Fed Chair Jerome Powell is having apress conference following the meeting, and to begin soon. Traders will parsePowell’s comments for clues on the pace of future U.S. rate hikes.

TheEuropean Central Bank holds its monetary policy meeting on Thursday. No changeis expected in ECB policy, but the central bank is still on a path of easymoney that is keeping its interest rates very low, and diverging with those ofthe U.S. More weak economic data coming out of the EU today-industrialproduction that fell more than expected-is another clue the ECB has to keep itsmonetary policy very accommodative. By the end of the year the spread betweenkey U.S. and Euro zone interest rates is expected to be around 3.0%.

TheU.S. producer price index for May was released today and came in at up 0.5%.The number was forecast to come in at up 0.3% from April. The markets did notshow a big reaction to the PPI report, but the data does show inflationarypressures are on the rise.

Thekey “outside markets” today find Nymex crude oil prices slightly lower andtrading just above $66.00 a barrel. The International Energy Agency said worldoil demand should remain strong in 2019, growing by 1.4 million barrels per day.Meantime, the U.S. dollar index is near steady early today.

Technically,gold price action has turned choppy and sideways recently. This has negated aprice downtrend and suggests a near-term market bottom is in place. The goldbulls and bears are on a level overall near-term technical playing field. Goldbulls' next upside near-term price breakout objective is to produce a closeabove solid technical resistance at the May high of $1,332.40. Bears' nextnear-term downside price breakout objective is pushing prices below solidtechnical support at the May low of $1,286.80. First resistance is seen at thisweek’s high of $1,307.00 and then at the June high of $1,312.60. First supportis seen at the June low of $1,293.10 and then at $1,286.80. Wyckoff's MarketRating: 5.0

Silverprices hit another six-week high above $17.00 today. The silver bulls have theoverall near-term technical advantage. Silver bulls' next upside price breakoutobjective is closing prices above solid technical resistance at the April highof $17.425 an ounce. The next downside price breakout objective for the bearsis closing prices below solid support at the May low of $16.07. Firstresistance is seen at today’s high of $17.025 and then at $17.11. Next supportis seen at this week’s low of $16.77 and then at $16.645. Wyckoff's MarketRating: 6.0.

JulyN.Y. copper closed down 15 points at 324.80 cents today. Prices closed nearmid-range on more mild profit taking after hitting a 4.5-month high late lastweek. The copper bulls still have the firm overall near-term technicaladvantage. A bull flag or bullish pennant pattern may be forming on the dailybar chart. Copper bulls' next upside price objective is pushing and closingprices above solid technical resistance at the December high of 334.20 cents.The next downside price objective for the bears is closing prices below solidtechnical support at this week’s low of 309.00 cents. First resistance is seenat 326.85 cents and then at 330.00 cents. First support is seen at today’s lowof 322.40 cents and then at 320.00 cents. Wyckoff's Market Rating: 7.0.

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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