Gold And Silver Score Gains Hit New Daily Highs Post-FOMC

(December 11, 2019- Kitco News, Jim Wycoff)

Gold and silver prices are higher and have hit new highs for the day in afternoon U.S. trading Wednesday. Some short covering in the futures markets and some bargain hunting in the cash markets are featured today, as the overall marketplace shrugged off an uneventful FOMC statement. February gold futures were last up $8.40 an ounce at 1,476.60. March Comex silver prices were last up $0.193 at $16.90 an ounce.

The U.S. economic highlight of the week saw the Federal Reserve’s Open Market Committee (FOMC) make no changes in its monetary policy, as expected. The statement said the U.S. economy is growing moderately and monetary policy is “appropriate.” The Fed says no interest rate cut is built in for 2020 and implies there could be a long pause in interest rate policy. The rally in the gold and silver markets, post-FOMC, could be in part because metals traders had reckoned the FOMC statement would lean more hawkish on U.S. monetary policy. The U.S. dollar index hit new daily lows after the FOMC statement, which is friendly for the metals markets.

Now, the FOMC statement and Fed Chairman Powell’s press conference will be closely scrutinized by traders for clues on future monetary policy moves.

The European Central Bank meets on monetary policy Thursday. That will be new ECB President Christine Lagarde’s first meeting.

This Sunday (Dec. 15) is the deadline for new U.S. trade tariffs going into effect against Chinese goods imported into the U.S. While the rhetoric this week has been mostly upbeat on the matter, the history of the U.S.-China trade war is one of distinct highs and lows regarding progress toward a deal. And the marketplace knows President Trump’s mercurial personality. Thus, markets and traders are likely to remain tentative the rest of this week, and slightly leaning toward risk aversion.

Technically, February gold futures bulls and bears are on a level overall near-term technical playing field amid recent choppy and sideways trading. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the December high of $1,489.90. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the November low of $1,453.10. First resistance is seen at today’s high of $1,477.40 and then at $1,480.00. First support is seen at this week’s low of $1,463.00 and then at $1,456.60. Wyckoff's Market Rating: 5.0

March silver futures bears have the overall near-term technical advantage. 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 $17.00 and then at last week’s high of $17.415. Next support is seen at this week’s low of $16.565 and then at $16.50. Wyckoff's Market Rating: 4.0.