Introduction
Gold and silver prices are showing weakness in early U.S. trading on Wednesday as investors await the conclusion of the Federal Reserve’s monetary-policy-setting meeting. The market is expecting quieter price action until the release of the FOMC statement and Fed Chair Powell’s press conference later in the day.
December gold is currently down $1.90 at $1,992.60, while December silver is down $0.172 at $22.78.
Central Bank Meetings
This week, the focus is on central bank meetings of the Federal Reserve and the Bank of England. Market expectations are for the FOMC to hold off on further interest rate increases during this meeting. The Bank of England will meet on Thursday to discuss its monetary policy.
Upcoming U.S. Employment Situation Report
In addition to the central bank meetings, market participants are also awaiting the U.S. employment situation report for October, which is scheduled to be released on Friday.
Market Outlook
Asian and European stocks were mixed to firmer overnight, while U.S. stock indexes are indicating a firmer opening for the New York day session. However, China’s private manufacturing purchasing managers index (PMI) declined more than expected in October, indicating a contraction in the sector.
The key outside markets today include a higher U.S. dollar index, and Nymex crude oil prices trading around $82.00 a barrel. The yield on the benchmark U.S. Treasury 10-year note is currently at 4.899%.
U.S. Economic Data
Today’s U.S. economic data includes the weekly MBA mortgage applications survey, the ADP national employment report, the U.S. manufacturing purchasing managers index (PMI), the ISM report on business manufacturing, the weekly DOE liquid energy stocks report, domestic auto industry sales, and construction spending.
Technical Analysis
From a technical standpoint, gold futures remain in an uptrend on the daily chart, with the next upside price target at $2,050.00. Support is seen at $1,950.00.
Silver futures also have a slight overall advantage in the near term, although the uptrend has stalled. The next upside price objective for silver is closing above solid resistance at $24.05, while support is seen at $22.00.
Conclusion
In conclusion, gold and silver prices are weaker ahead of the Federal Reserve meeting, with investors waiting for the FOMC statement and Powell’s press conference. The Bank of England’s meeting and the upcoming U.S. employment situation report are also key events to watch. Market outlook suggests mixed to firmer stocks, while the U.S. dollar index is higher and crude oil prices are up. Technical analysis shows an uptrend for gold and a slight advantage for silver.
