Gold Upticks A Bit On Slightly Dovish FOMC Minutes

(Kitco News) - Gold prices arenear steady in afternoon U.S. trading Wednesday, in the wake of thejust-released FOMC minutes that were deemed as tilting barely toward the dovishcamp on monetary policy. June Comex gold futures were last down $0.30 an ounceat $1,291.70. July Comex silver was last down $0.14 at $16.435 an ounce.

TheU.S. data-point highlight of the week is Wednesday afternoon’s release of theFederal Open Market Committee (FOMC) minutes from the last meeting, held on May1-2. At that meeting the Fed left interest rates unchanged, as expected.Today’s minutes showed FOMC members continue to expect to gradually raise interestrates, and likely to move again in June. The U.S. economy is likely to grow alittle faster in the second quarter than in the first, members believed. FOMCmembers said they are cognizant about the uptick in inflationary pricepressures, but not overly concerned about it. They said wage-inflationpressures remain muted. An overall U.S. price inflation pace running at about2.0% on an annual basis is right about where the Fed would like it to be.However, FOMC members were a bit concerned about rising oil prices contributingto an unwanted additional uptick in inflation. Some FOMC members said an annualU.S. inflation rate slightly above 2.0% would not be problematic. Themarketplace deemed the FOMC minutes as just slightly dovish, but markets did notshow a big reaction to this afternoon’s report.

Theworld’s traders and investors were not so upbeat today, following commentsTuesday from U.S. President Donald Trump that suggested the U.S. and China arestill far apart on a trade dispute resolution. Also, the NAFTA trade talksbetween the U.S., Mexico and Canada have broken down. Furthermore, Trump saidhis meeting with North Korea’s leader Kim Jong Un may not take place. Politicaluncertainty in Italy, as a new government tries to form, is also added to themix of more anxiety in the world marketplace. All of the above augurs in favorof the safe-haven gold and silver markets.

Thekey “outside markets” today find Nymex crude oil prices weaker on profit takingafter hitting a 3.5-year high on Tuesday. The rallying oil market is a bullishunderlying factor for the raw commodity sector, including the preciousmetals-even though the metals have not seen much upside price action recently.

Meantime,the U.S. dollar index is solidly higher and hit another six-month high today.The appreciating greenback has been a major bearish element for the preciousmetals markets in recent weeks.

Technically,gold prices are in a two-month-old downtrend on the daily bar chart. The goldbears have the overall near-term technical advantage. Gold bulls' next upsidenear-term price breakout objective is to produce a close above solid technicalresistance at $1,300.00. Bears' next near-term downside price breakoutobjective is pushing prices below solid technical support at the December lowof $1,247.20. First resistance is seen at today’s high of $1,298.40 and then at$1,300.00. First support is seen at today’s low of $1,286.70 and then at thisweek’s low of $1,281.20. Wyckoff's Market Rating: 3.5

Thesilver bears have the overall near-term technical advantage. Silver bulls' nextupside price breakout objective is closing prices above solid technicalresistance at $17.00 an ounce. The next downside price breakout objective forthe bears is closing prices below solid support at the May low of $16.07. Firstresistance is seen at today’s high of $16.60 and then at this week’s high of$16.70. Next support is seen at this week’s low of $16.28 and then at the Maylow of $16.19. Wyckoff's Market Rating: 3.5.

JulyN.Y. copper closed down 610 points at 307.10 cents today. Prices closed nearerthe session low today. The copper bulls and bears are back on a level overallnear-term technical playing field. Copper bulls' next upside price objective ispushing and closing prices above solid technical resistance at the April highof 321.80 cents. The next downside price objective for the bears is closingprices below solid technical support at the May low of 301.40 cents. Firstresistance is seen at 310.00 cents and then at today’s high of 313.20 cents.First support is seen at today’s low of 304.85 cents and then at the May low of301.40 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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