Gold Price Holds Slight Gains In Late US Trading
New York (Dec 18) Gold futures prices are trading slightly higher and not far below the session high in early-afternoon U.S. trading Tuesday. Some chart-based buying and support from a weaker U.S. dollar index early this week were bullish elements that just slightly offset the bearish specter of a serious bear market in crude oil that saw Nymex futures prices drop to a 15-month low of $47.49 today. February gold futures were last up $1.30 an ounce at $1,253.00. March Comex silver was down $0.039 at $14.72 an ounce.
European and Asian stock markets were mostly weaker overnight. U.S. stock indexes were posting moderate rebounds at midday today, after dropping to new lows for the year on Monday. The small-cap Russell 2000 index is now in bear market territory—down 20% from its high. If the stock market continues to sell off and see volatile trading, such would be a bullish element for safe-haven gold and silver markets.
The U.S. Federal Reserve’s Open Market Committee (FOMC) is meeting today and Wednesday to discuss monetary policy, while the U.S. government could be shut down at the end of the week if Congress and President Trump cannot agree on a budget plan. Many expect the FOMC to raise interest rates by 0.25% on Wednesday afternoon, at the conclusion of their meeting. However, that is not a strong consensus. The expectations for a rate hike diminished recently after proclamations from President Trump, his closes economic advisors and noted market analysts and traders that the Fed should leave interest rates alone.
A heavy slate of U.S. economic data is also due out the rest of this week, besides the FOMC conclusion, including the first estimate of third-quarter gross domestic product.
Technically, February gold bulls have the overall near-term technical advantage. A five-week-old price uptrend is in place on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the July high of $1,284.10. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,225.00. First resistance is seen at the December high of $1,256.60 and then at $1,260.00.
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