Gold shows little reaction to widely expected 0.25% Fed rate hike
Gold prices are moderately higher in afternoon U.S. trading Wednesday and have shown little initial reaction to the U.S. central bank raising its main interest rate by a small amount, which was fully expected by the marketplace. August gold was last up $8.70 at $1,972.40 and September silver was up $0.181 at $25.005.
The just-released U.S. data point of the week, if not the month, saw the Federal Reserve's Open Market Committee (FOMC) raise the Fed funds rate by 25 basis points, to a range of $5.25% to 5.50% and at a 22-year high. The FOMC statement said U.S. economy is growing moderately but job gains have been "robust." Markets showed very little initial reaction. However, the marketplace will closely scrutinize Fed Chair Powell's remarks at his press conference for clues on the trajectory of Fed monetary policy in the coming months. Powell's press conference may be the bigger markets-mover this afternoon. Traders want to see if Powell continues to lean hawkish on U.S. monetary policy, or if he eases up a bit given the tamer U.S. inflation readings recently.
U.S. stock indexes are mixed in afternoon trading
U.S. dollar to weaken as BOE and ECB play catch-up with the Fed, but it will remain the world's reserve currency – Invesco's Hooper
The key outside markets today see the U.S. dollar index weaker. Meantime, Nymex crude oil prices are weaker and trading around $79.00 a barrel. The benchmark 10-year U.S. Treasury note yield is presently fetching 3.887% and moved very little after the Fed rate increase and FOMC statement.
Technically, August gold futures bulls have the slight overall near-term technical advantage but need to show fresh power soon to keep it. Prices are in a three-week-old uptrend on the daily bar chart, but just barely. Bulls' next upside price objective is to produce a close above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the June low of $1,900.60. First resistance is seen at today's high of $1,976.30 and then at the July high of $1,989.80. First support is seen at today's low of $1,963.20 and then at this week's low of $1,951.60. Wyckoff's Market Rating: 5.5
September silver futures bulls have the overall near-term technical advantage. A four-week-old price uptrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $26.00. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at the July high of $25.475 and then at $26.00. Next support is seen at this week's low of $24.425 and then at $24.00. Wyckoff's Market Rating: 6.5.
September N.Y. copper closed down 155 points at 390.00 cents today. Prices closed near mid-range today. The copper bulls have the slight overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the June high of 396.40 cents. The next downside price objective for the bears is closing prices below solid technical support at 368.30 cents. First resistance is seen at the July high of 395.40 cents and then at 396.40 cents. First support is seen at Tuesday's low of 384.45 cents and then at last week's low of 378.10 cents. Wyckoff's Market Rating: 5.5.
By
Jim Wyckoff
For Kitco News
Tim Moseley