Gold Weaker; Bears in Technical Control; FOMC Results Awaited

By Paul Ploumis 17 Jun 2015 Last updated at 04:01:44 GMT

(Kitco News) - Gold prices ended the U.S. day session modestly lower Tuesday. While some safe-haven demand has limited selling pressure in gold early this week, the solidly bearish near-term technical posture for gold keeps the path of least resistance for prices sideways to lower. Focus is now turning to the conclusion of this week’s FOMC meeting. August Comex gold was last down $4.40 at $1,181.40 an ounce. July Comex silver was last down $0.113 at $15.97 an ounce.

The Federal Reserve’s Open Market Committee (FOMC) began its meeting on U.S. monetary policy Tuesday morning. The meeting ends Wednesday afternoon with a statement that includes new economic projections and will be followed by a press conference from Fed Chair Janet Yellen. Most market watchers do not expect the FOMC to raise interest rates at this week’s meeting, but instead do so in September or later. Still, the FOMC statement and Yellen press conference will be very closely scrutinized by the market place, and market price action could become active in the immediate aftermath of the meeting.

European stock markets were lower Tuesday, pressured in part by the Greece-EU debt negotiations that broke down Sunday. The IMF pulled out of the talks last week. Reports say Greece’s prime minister will try to deal directly with European Union leaders on the matter, starting with a Euro zone member meeting on Thursday. Greek bond yields have pushed higher and are now trading above 29% for the two-year note. This compares with the safe-haven German bund that now sees the 10-year issue trading at 0.78%. Some European analysts are saying a Greek debt deal must be reached by the end of June, or Greece will default on its debt obligations. The market place is coming to the realization Greece will probably default on its debt payments. This means that when the event actually occurs, markets price action will probably not be too volatile because the event has been factored in to markets’ price structures. Still, gold is seeing some mild safe-haven demand from the Greek debt crisis.

The London P.M. fix is $1,177.75 versus the previous A.M. fixing of $1,182.10.

Courtesy: Kitco News