Gold Ends Slightly Lower As Focus Turns to FOMC
New York (Oct 27) Gold Ends Slightly Lower; Focus Turns to FOMCNo major, unsettling news developments occurred over the weekend, which limited buying interest in safe-haven gold. A weaker U.S. dollar index on this day did keep the gold sellers from getting too aggressive. Traders and investors are now awaiting this week’s FOMC meeting. December Comex gold was last down $2.40 at $1,229.40 an ounce. Spot gold was last quoted down $1.80 at $1,229.60. December Comex silver last traded down $0.022 at $17.16 an ounce.
Focus is turning to the Federal Open Market Committee (FOMC) of the U.S. Federal Reserve’s regular meeting Tuesday and Wednesday. As usual, the Wednesday afternoon statement from the FOMC at the conclusion of the meeting will be very closely scrutinized by the market place. Most believe the Fed will formally end its monthly bond-buying program, called quantitative easing.
Attention is also on the two key “outside markets” that impact many other markets: the U.S. dollar and crude oil. The dollar index was weaker Monday but still hovering not far below its recent four-year high. Meantime, Nymex crude oil prices were lower and hovering near a two-year low. The next downside technical target for nearby crude oil is $75.00 a barrel, which I believe will be reached in the coming weeks.
The much-anticipated stress test results on European Union financial institutions were released over the weekend. While there were some EU banks that failed the tests, overall the results were not deemed threatening to the EU financial system.
There was another downbeat economic report coming out of the EU Monday, as Germany’s Ifo business confidence index came in at 103.2 in October, versus 104.7 in September. The Ifo reading this month was at a two-year low.
The London P.M. gold fix was $1,228.75 versus the previous London A.M. fixing of $1,230.50.
Technically, December gold futures prices closed near mid-range in quieter trading. The bears have the firm near-term technical advantage. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the October high of $1,255.60. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,200.00. First resistance is seen at $1,234.70 and then at $1,240.00. First support is seen at last week’s low of $1,226.30 and then at $1,222.00. Wyckoff’s Market Rating: 3.0
December silver futures prices closed nearer mid-range in quieter trading today. The silver bears have the solid overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the October high of $17.82 an ounce.
Source: KitcoNews
