Gold lower, shows little reaction as FOMC announces tapering

 New York (Nov 3) Gold prices are sharply down in afternoon U.S. dealings Wednesday. This afternoon’s FOMC statement from the Federal Reserve saw the U.S. central bank announce it will begin tapering its bond-buying program in November, by $15 billion. The FOMC statement said December and following months will also likely see the paring back of bond-buying. The Fed said inflation remains elevated. Markets showed little reaction to the FOMC statement, as traders and investors had pretty much dialed in what the Fed would do today, and that the tenor would favor the hawkish camp. Now, traders are awaiting Fed Chairman Jay Powell’s press conference. December gold was last down $22.40 at $1,766.20 and December Comex silver was last down $0.197 at $23.315 an ounce.

Gold and silver markets fell to three-week lows today and their near-term price uptrends have been negated—giving the bears some momentum.

Meantime, today’s U.S. ADP national employment report for October showed a gain of 571,000, which was above expectations for a rise of 395,000 and compares to  a rise of 568,000 in the September report. Markets showed now significant reactions to the report. On Friday the more important 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.

Global stock markets were mixed to weaker in overnight trading. The U.S. stock indexes are mixed this afternoon. The U.S. indexes hit record highs on Tuesday.

The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are sharply lower and trading around $80.85 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.589%. 

Technically, December gold futures prices hit a three-week low today. Bulls have lost their overall near-term technical advantage as a four-week-old price uptrend on the daily bar chart has been negated. Bulls’ next upside price objective is to produce a close above solid resistance at the October high of $1,815.50. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the September low of $1,721.10. First resistance is seen at $1,775.00 and then at $1,785.00. First support is seen at today’s low of $1,758.50 and then at $1,750.00. Wyckoff's Market Rating: 5.0

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