Gold Down on Technical Correction; FOMC Minutes Add More Pressure

San Francisco (Apr 8)  Gold prices ended the U.S. day session moderately lower Wednesday on another corrective pullback from early-week gains. The latest Federal Open Market Committee (FOMC) minutes from last month’s meeting showed that FOMC members were divided on the timing of a U.S. interest rate hike. Markets initially brushed off the minutes as containing nothing new. However, upon reflection gold market traders deemed the minutes as a bit bearish and gold further weakened by a few dollars. June Comex gold was last down $12.40 at $1,198.10 an ounce. May Comex silver was last down $0.465 at $16.375 an ounce.

Sharply lower crude oil prices on this day also limited buying interest in gold and silver. This key “outside market” saw pressure on a big build up in U.S. crude oil stockpiles, in a weekly report issued Wednesday. Crude oil prices have worked up from the multi-year low scored in mid-March, to still begin to suggest a market bottom is in place.

The U.S. dollar index was solidly lower in overnight trading Wednesday but did rebound during the U.S. trading session and then move to its daily high after the FOMC minutes. This also helped to pressure gold in the aftermath of the FOMC minutes. There are still early technical clues the dollar index has put in a major top.

The London P.M. gold fix is $1,207.25 versus the previous P.M. fixing of $1,211.10.

Technically, June gold futures prices closed nearer the session low again today on another corrective pullback after prices hit a six-week high on Monday. A three-week-old uptrend is still in place on the daily bar chart. Gold bears still have the overall near-term technical advantage. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,224.50. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,178.20. First resistance is seen at today’s high of $1,212.50 and then at Tuesday’s high of $1,215.90. First support is seen at $1,194.80 and then at $1,190.00. Wyckoff’s Market Rating: 3.0

May silver futures prices closed nearer the session low and hit a three-week low today. Silver bears have the near-term technical advantage and gained some downside momentum today. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at the March high of $17.405 an ounce.

Source: KitcoNews