Gold Price Pauses After Gains Wed.; No Reaction To FOMC Minutes
New York (Nov 29) Gold prices are steady to slightly lower in early-afternoon U.S. trading Thursday, as the market paused and consolidated after the gains seen on Wednesday. February gold futures were last down $0.70 an ounce at $1,229.10. March Comex silver was down $0.075 at $14.38 an ounce.
Traders got an update on Federal Reserve policy discussion when the FOMC minutes were released this afternoon. The minutes said FOMC members were virtually unanimous that another U.S. interest rate rise soon is warranted. However, the minutes appeared to corroborate Fed Chairman Jerome Powell’s speech on Wednesday, in which he seemed to dial down the prospects of a few more small interest rate increases in 2019. The metals markets and other markets did not show significant reactions to the FOMC minutes.
In a speech to the Economic Club of New York Wednesday, Powell’s dovish comments sparked rallies in the gold and silver markets. Powell said at present, U.S. interest rates are just below “neutral” levels and that the Fed will remain data dependent, with no set path on adjusting interest rates. Prior to Powell’s speech, the sense of the marketplace was that the Federal Reserve would continue on a gradual rate-hike course in 2019. The U.S. stock market rallied strongly on the news, while the U.S. dollar index sold off Wednesday.
Focus of the marketplace is on the upcoming Group of 20 meetings that begin Friday in Argentina and will feature a face-to-face meeting between the U.S. and Chinese presidents on Saturday. The world’s two largest economies are locked in a heated trade war.
The key outside markets today find Nymex crude oil futures prices higher on short covering after hitting a 13-month low of $49.41 a barrel overnight. Rising U.S. oil inventories are prompting the fresh selling pressure. Crude prices are down around 30% following the recent sharp declines. A key OPEC oil cartel meeting is scheduled for next week in Vienna, Austria.
The other key outside market today finds the U.S. dollar index trading slightly firmer.
Technically, the gold bears still have the overall near-term technical advantage but the bulls have gained some upside momentum late this week. Gold bulls' next upside near-term price breakout objective is to produce a close in February futures above solid technical resistance at the October high of $1,252.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,200.00.
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