Gold Price Ends Narrowly Mixed; Weaker U.S. Dollar Limits Selling as FOMC Awaited
New York (Mar 16) Gold futures prices ended the U.S. day session slightly higher Monday, while the cash, or spot, market finished modestly lower. A weaker U.S. dollar index on this day also encouraged some buying interest in gold and silver markets. Focus has turned to this week’s FOMC meeting. April Comex gold was last up $1.60 at $1,154.00 an ounce. May Comex silver was last up $0.121 at $15.615 an ounce.
The U.S. dollar index saw a corrective pullback Monday after hitting a 12-year high last week. Meantime, the Euro currency was firmer on a short-covering bounce after hitting a 12-year low in early dealings Monday.
Oil prices were lower and touched a fresh six-year low to start the trading week, as an already glutted world oil market faces the prospect of Iranian oil exports re-entering the world supply equation. Western nations and Iran are presently meeting and trying to agree on a deal that would lift Western sanctions against Iranian oil. However, many believe the complete lifting of the sanctions is still not likely any time soon. More serious chart damage has been inflicted with the new for-the-move low in crude oil today, which suggests prices falling still farther, with upper $30s per barrel now very possible in the coming weeks or few months—or sooner. The weaker oil prices on Monday were a bearish factor that worked against the entire raw commodity sector.
Traders and investors are awaiting this week’s meeting of the U.S. Federal Reserve’s Open Market Committee (FOMC), which begins Tuesday and ends early Wednesday afternoon. The market place is wondering about the timing of the FOMC raising interest rates, with some reckoning a hike could come as early as June and others wondering if a rate increase will even occur this year. Many look for the Fed to take the word “patient” out of its statement, regarding when to decide to raise interest rates. The FOMC will also release its latest economic projections Wednesday, and Fed Chair Janet Yellen will hold a press conference after the FOMC meeting.
In overnight news, China during the weekend hinted it will continue to ease its monetary policy to boost its economic growth. The Chinese premiere said his country has more tools to use to boost growth, if such is warranted. His comments gave a boost to Asian stock and commodity markets.
Russia said its economy contracted by 0.7% in the first quarter, year-on-year. It is expected that Russia’s economy during the entire year of 2015 will see a decline in annual GDP of 5.0%.
On Friday history will be made in the gold market when the London Bullion Market Association moves to an electronically determined daily gold fix based upon many more gold market participants. The daily gold fixes had been determined by a small number of banks for the past 100 years.
The London P.M. gold fixing is $1,150.75 versus the previous A.M. fixing of $1,157.00.
Technically, April gold futures prices closed nearer the session low after prices last week hit a 3.5-month low. A seven-week-old downtrend is in place on the daily bar chart. Bears remain in solid technical control. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,174.40. Bears' next near-term downside price breakout objective is closing prices below solid technical support at the December low of $1,143.40. First resistance is seen at today’s high of $1,163.30 and then at $1,170.00. First support is seen at today’s low of $1,149.30 and then at last week’s low of $1,146.50. Wyckoff’s Market Rating: 2.0
May silver futures prices closed near mid-range and saw short covering in a bear market. Prices last week hit a nine-week low. Silver bears have the solid near-term technical advantage. A seven-week-old downtrend is in place on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $16.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.00. First resistance is seen at today’s high of $15.755 and then at last week’s high of $15.96.
Source: KitcoNews
