Gold sees post-FOMC relief rally, safe-haven demand on Russia concerns

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(Kitco News) – Prayed prices are solidly higher in US afternoon trade on Wednesday, after hitting a nearly 2.5-year low earlier in the afternoon. The yellow metal is seeing a “relief rally” after the FOMC meeting statement with no big surprises, an interest rate hike as expected, and Fed Chair Powell’s press conference comments, they were not considered more aggressive than the market expected. Additionally, safe haven demand appears in gold and silver after Russia stepped up its war efforts and made nuclear threats. Metals bulls perked up further in the late afternoon as the US Dollar Index pulled back sharply from its daily high. October gold was up $24.20 at $1,685.20 and December silver was up $0.737 at $19.92.

In the Federal Reserve’s FOMC statement this afternoon, the US central bank raised the key federal funds rate by 0.75% for the third consecutive meeting, to a range of 3.0% to 3 .25%, in an effort by the Fed to rein in troublesome price inflation. The statement says the Fed sees the fed funds rate at 4.6% by the end of 2023 and then declining slightly over the next two years. The Fed is “very vigilant” to inflation risks, the statement said. The Fed also slightly lowered its US GDP growth forecast.

The Bank of England also holds its monetary policy meeting on Thursday and is also expected to raise interest rates.

Risk aversion remains high midweek following news that Russian President Putin will partially mobilize more Russian troops to fight his war with Ukraine, including hinting in a speech that he might use nuclear weapons if integrity of Russia is threatened. One analyst said the longer the war drags on and with Russia making little or no further progress, the more threatened Putin will become, which could prompt the dictator to take more drastic measures to ensure his own survival.



Global stock markets were mixed overnight, with Asian stocks mostly down and European equities mostly higher. US stock indices are firmer.

Key outside markets today see Nymex crude oil prices slightly higher and trading around $84.00 per barrel. The US dollar index is higher but far from its daily high after pushing another 20-year high earlier today. The yield on the US 10-year Treasury note is reaching 3.524%.

24 hour live gold chart [Kitco Inc.]

Technically, October gold futures bears have the overall short-term technical advantage. However, today’s big “outside day” on the daily bar chart suggests that the bears are now exhausted and a short-term market bottom may be in place. The next bullish price objective for the Bulls is to produce a close above solid resistance at $1,700.00. The bears’ next short-term downside price objective is to push futures prices below solid technical support at $1,600.00. The first resistance is seen at $1,700.00 and then at $1,715.00. First support is seen at today’s low of $1,651.50 and then $1,635.00. Wyckoff Market Rating: 2.0.

24 hour live silver chart [ Kitco Inc. ]

December silver futures bears have the overall strong short-term technical advantage. The next bullish price objective for the Silver Bulls is to close prices above solid technical resistance at $21.00. The next downside price objective for the bears is to close prices below the solid support at $18.00. The first resistance is seen at today’s high of $19.77 and then at $20.00. The next support is seen at $19.00 and then last week’s low of $18.77. Wyckoff Market Rating: 2.5.

December NY copper closed down 425 points at 346.00 cents today. Prices closed near today’s session low. Copper bears have the overall short-term technical advantage. The next upside price objective for copper bulls is to push and close prices above solid technical resistance at the August high of 378.35 cents. The next downside price objective for the bears is to close prices below solid technical support at the July low of 315.55 cents. First resistance is seen at this week’s high of 355.80 cents and then 360.00 cents. First support is seen at last week’s September low of 354.40 cents and then 350.00 cents. Wyckoff Market Rating: 3.0.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has gone to great lengths to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange of commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for loss and/or damage arising from the use of this publication.

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