Gold Ends Weaker, at 4-Week Low; FOMC A Non-Event

Jim Wyckoff  

Wednesday May 03, 2017 14:14

(Kitco News) - Gold prices ended the U.S. day session moderately down and hit a four-week low Wednesday. The sellers have some momentum amid a lack of fresh, bullish news to support the safe-haven metal. The just-released FOMC statement contained no surprises the markets were not significantly impacted. There are other important economic and political developments that also lie just ahead. June Comex gold was last down $8.80 an ounce at $1,255.30. July Comex silver was last down $0.179 at $16.59 an ounce.

Wednesday afternoon’s FOMC statement at the conclusion of the two-day meeting of Federal Reserve officials said U.S. economic growth has slowed recently, but not enough to change the Fed’s intentions on gradually raising interest rates down the road.

The next key data point is Friday’s April U.S. employment report from the Labor Department. The key non-farm payrolls number in Friday’s jobs report is forecast to come in at up around 190,000. Today the ADP national employment report showed a rise of 177,000 jobs in April.

Traders and investors are also looking ahead to this weekend’s French presidential elections. A surprise win by the right-wing candidate Marine Le Pen would likely roil many stock and financial markets. Market watchers remember that Donald Trump was not expected to win the U.S. presidential election, either. The two French candidates are holding a televised debate Wednesday evening, which could sway voters.

The key outside markets on Wednesday saw the U.S. dollar index trading modestly higher. The greenback bears still have the overall near-term technical advantage. Meantime, Nymex crude oil prices were slightly higher but the bears have the near-term technical advantage as prices hit a 5.5-month low on Tuesday.

Technically, June gold futures prices closed nearer the session low today. The gold bulls and bears are on a level overall near-term technical playing field, but the bears still have momentum on their side. Prices are in a three-week-old downtrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,241.50. First resistance is seen at today’s high of $1,257.80 and then at this week’s high of $1,272.40. First support is seen at today’s low of $1,245.60 and then at 1,241.50. Wyckoff's Market Rating: 5.0

July silver futures prices closed nearer the session low and hit another 3.5-month low today. The silver market bears have the solid overall near-term technical advantage amid the recent steep downdraft in prices. This market is now way short-term oversold, technically, and due for a decent bounce very soon. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at today’s high of $16.895 and then at $17.00. Next support is seen at today’s low of $16.52 and then at $16.25. Wyckoff's Market Rating: 2.5.

May N.Y. copper closed down 970 points at 253.85 cents today. Prices closed near the session low. The copper bears have gained the slight overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 273.10 cents. The next downside price objective for the bears is closing prices below solid technical support at the April low of 250.85 cents. First resistance is seen at 255.00 cents and then at 260.00 cents. First support is seen at today’s low of 253.70 cents and then at 250.85 cents. Wyckoff's Market Rating: 4.5