Gold sees a post-FOMC relief rally, demand for a safe haven for Russia’s concerns

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(Kitco News) – Gold prices are solidly higher in US afternoon trading on Wednesday, after hitting a nearly 2.5-year low in the early afternoon. The yellow metal is seeing a “relief rally” after the FOMC meeting statement with no major surprises, an expected interest rate hike, and Fed Chairman Powell’s press conference comments were deemed no more aggressive than the market. expected. Furthermore, the demand for safe haven is present in gold and silver after Russia stepped up its war efforts and launched nuclear threats. Metals bulls were further encouraged in the late afternoon as the US dollar index backed off its daily high. October gold was up $ 24.20 to $ 1,685.20 and December silver was up $ 0.737 to $ 19.92.
The Federal Reserve’s FOMC statement this afternoon saw the US central bank raise the key Fed funds rate by 0.75% for the third consecutive meeting, to a range of 3.0% to 3.25% , in an attempt by the Fed to reduce problematic price inflation. The statement states that the Fed sees the Fed funds rate at 4.6% at the end of 2023 and then decreases slightly over the next two years. The Fed is “very alert” to inflation risks, the statement said. The Fed also lowered its forecast for US GDP growth slightly.
The Bank of England also holds its monetary policy meeting on Thursday and is also expected to raise interest rates.
Risk aversion remains high in the middle of the week following news that Russian President Putin will partially mobilize more Russian troops to fight in his war with Ukraine, including hinting in a speech that he could use nuclear weapons if the integrity of the Russia was under threat. One analyst said that the longer the war drags on and with Russia making little or no further progress, Putin will become more threatened, which could prompt the dictator to take more drastic measures to ensure his own survival.

Global equity markets were mixed overnight, with Asian stocks mostly down and European stocks mostly up. US stock indices are more solid.
Major external markets today see Nymex crude prices rising slightly and trading around $ 84.00 per barrel. The US dollar index is higher but well above its daily high after being pushed to another 20-year high earlier today. The 10-year US Treasury bond yield reaches 3.524%.

Technically, the 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 near-term market low may be in place. The bulls’ next bullish price target is to produce a close above the solid resistance at $ 1,700.00. Bears’ next short-term bearish price target is pushing futures prices below solid technical support at $ 1,600.00. The first resistance was seen at $ 1,700.00 and then $ 1,715.00. First support is seen at today’s low of $ 1,651.50 and then $ 1,635.00. Wyckoff’s market valuation: 2.0.

24 hour real time silver chart [ Kitco Inc. ]

The bears on the December silver futures have the firm’s overall technical advantage in the short term. The next upside target for the silver bulls is to close the price above the solid technical resistance at $ 21.00. The next bearish price target for the bears is to close the price below the solid support at $ 18.00. The first resistance was seen at today’s high of $ 19.77 and then at $ 20.00. Next support is at $ 19.00 and then last week’s low of $ 18.77. Wyckoff’s market valuation: 2.5.
December NY copper closed today down 425 points at 346.00 cents. Prices closed near the session low today. Copper bears have the overall short-term technical advantage. The copper bulls’ next bullish price target is pushing and closing prices above the solid technical resistance at the August high of 378.35 cents. The next downside price target for the bears is to close prices below solid technical support at the July low of 315.55 cents. The first resistance was seen at this week’s high of 355.80 cents and then at 360.00 cents. First support is seen at last week’s low of the September low of 354.40 cents and then at 350.00 cents. Wyckoff’s market valuation: 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 made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee this accuracy. This article is for informational purposes only. It is not a solicitation to trade in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article disclaim any liability for loss and / or damage resulting from the use of this publication.


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