Gold up, but loses altitude as FOMC meets

(Kitco News) – Gold prices are modestly higher and silver around steady near midday Tuesday. Both metals modestly extended overnight gains and hit session highs following a morning U.S. inflation report that was in line with expectations. However, prices have backed down from daily highs on position evening as the U.S. central bank will provide an update on its monetary policy Wednesday afternoon. Solidly lower crude oil prices are also a bearish daily outside-market element for the metals. February gold was last up $3.50 at $1,997.10. March silver was last down $0.008 at $23.05.

The U.S. economic data point of the day saw the consumer price index report for November come in at up 3.1%, with the core rate (minus food and energy) coming in at up 4.0%. Both figures are year-on-year and are the same readings as seen in the October report. The November year-on-year numbers came in right in line with market expectations. The modest rallies in gold and silver following the CPI data suggest traders were relieved inflation did not uptick in November. Recent economic data from the world’s major economies has generally shown cooling inflation.

Focus is now squarely on the two-day Federal Open Market Committee (FOMC) monetary policy meeting of the Federal Reserve begins today and ends Wednesday afternoon with a statement and press conference from Fed Chairman Jerome Powell. The marketplace consensus is that the FOMC will leave interest rates unchanged. However, it’s also expected the FOMC statement and Powell at his press conference will still lean a bit hawkish by saying the inflation fight is not yet finished. Still, many market watchers expect the Fed to cut U.S. interest rates by mid-year in 2024.

The key outside markets today see the U.S. dollar index weaker. Nymex crude oil prices are solidly down, near the recent for-the-move low, and trading around $69.00 a barrel. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.227%.

Technically, February gold futures bulls have the overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,075.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,955.40. First resistance is seen at today’s high of $2,012.50 and then at this week’s high of $2,023.70. First support is seen at this week’s low of $1,991.20 and then at $1,975.00. Wyckoff’s Market Rating: 6.0

March silver futures bears have the slight overall near-term technical advantage. Prices are now trending down on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $24.50. The next downside price objective for the bears is closing prices below solid support at the October low of $21.17. First resistance is seen at today’s high of $23.45 and then at $23.75. Next support is seen at $23.00 and then at $22.75. Wyckoff’s Market Rating: 4.5.

March N.Y. copper closed up 115 points at 379.20 cents today. Prices closed near mid-range today. The copper bulls have the slight overall near-term technical advantage. Prices are in a choppy, seven-week-old uptrend on the daily bar chart. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at the December high of 393.30 cents. The next downside price objective for the bears is closing prices below solid technical support at the November low of 362.60 cents. First resistance is seen at this week’s high of 383.60 cents and then at Friday’s high of 386.40 cents. First support is seen at today’s low of 376.65 cents and then at last week’s low of 372.90 cents. Wyckoff’s Market Rating: 5.5.

Try out my “Markets Front Burner” email report. My next one is due out today and is going to be entitled, “When China sneezes…” Front Burner is my best writing and analysis, I think, because I get to look ahead at the marketplace and do some market price forecasting. And it’s free! Sign up to my new, free weekly Markets Front Burner newsletter, at  https://www.kitco.com/services/markets-front-burner.html .