Gold and silver pull back ahead of FOMC conclusion Wed. PM

New York (Nov 2)  Gold and silver prices  are down in midday U.S. trading Tuesday, with silver sharply lower. A higher U.S. dollar index and lower crude oil prices today are negative outside markets for the metals. Some position-evening in the futures markets ahead of Wednesday afternoon’s conclusion of the Fed’s FOMC meeting is also featured. Some speculative shorts may also have stepped in on the sell side today, reckoning the FOMC statement will favor the metals market bears. December gold was last down $6.80 at $1,789.10 and December Comex silver was last down $0.628 at $23.445 an ounce.

It’s a busy U.S. data week, highlighted by the Federal Reserve’s Open Market Committee (FOMC) meeting that began Tuesday morning and ends Wednesday afternoon with a statement. Most Fed watchers believe the central bank will announce the timing of tapering of its monthly bond purchases after this meeting. Some may believe a taper announcement would put selling pressure into the gold and silver markets. However, others point to the historical aspects of higher interest rates and rising price inflation being overall bullish for hard assets, including the metals. Those who think they know how the metals will react to the likely Fed-tapering announcement may be sorely disappointed.

Global stock markets were mostly weaker in overnight trading. The U.S. stock indexes are higher and at record highs at midday. Solid U.S. corporate earnings reports the past few weeks have driven the U.S. stock indexes to new highs.

On Friday the U.S. employment situation report for October is due. The key non-farm payrolls component of that report is expected to rise 450,000 compared to a rise of 194,000 in the September report.

The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are lower and trading around $84.00 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.553%. 

Technically, December gold futures bulls have the overall near-term technical advantage amid a four-week-old price uptrend still in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the September high of $1,836.90. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,750.00. First resistance is seen at $1,800.00 and then at the October high of $1,815.50. First support is seen at this week’s low of $1,780.20 and then at last week’s low of $1,772.40.

KitcoNews