(Kitco News) - Gold and silver prices are sharply lower in early U.S. trading Tuesday. The precious metals are feeling the pressure of a likely hawkish major central bank meeting that gets under way in just a couple hours. June gold was last down $35.40 at $2,322.30. May silver was last down $0.803 at $26.57.
This week’s U.S. data highlights include the Federal Reserve’s Open Market Committee meeting that begins in just a couple hours and ends Wednesday afternoon with a statement and press conference from Fed Chair Jerome Powell. No changes in monetary policy are expected, but the FOMC statement and Powell’s presser will be very closely scrutinized by the marketplace. Recent warmer U.S. inflation data has prompted traders and analysts to dial back their timelines on interest rate cuts from the Fed, if they come at all this year.
A headline in the Wall Street Journal today reads: “Fed to signal it has stomach to keep rates higher for longer.” The story was written by reporter Nick Timiraos, who many believe has the inside track on getting top Fed officials to talk with him. He writes: “Firmer-than-anticipated inflation in the first three months of the year has likely postponed rate cuts for the foreseeable future.” Timiraos added the Fed will hold interest rates a level that will “provide meaningful restraint” to U.S. economic activity for longer than the Fed previously anticipated.
On Friday morning comes the U.S. jobs report from the Labor Department.
Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed to toward weaker openings when the New York day session begins.
In overnight news, the Bank of Japan confirmed it intervened significantly in the foreign exchange market Monday to support the yen.
Also, Eurozone inflation held steady in April as the consumer price index was up 2.4%, year-on-year, which is the same as reported in March.
China’s Communist Party Politburo on Tuesday signaled it wants to continue to prop up its economy by cutting interest rates, especially to support its listing property sector.
The key outside markets today see the U.S. dollar index modestly up. Nymex crude oil prices are slightly up and trading around $82.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is fetching 4.634%.
Other U.S. economic data due for release Tuesday includes the weekly Johnson Redbook retail sales report, the employment cost index, the monthly house price index, the S&P Core-Logic home indexes, the ISM Chicago business survey, and the consumer confidence index.
Technically, the gold futures bulls have the firm overall near-term technical advantage. However, a price uptrend on the daily bar chart has stalled out. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $2,400.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,250.00. First resistance is seen at today’s high of $2,347.60 and then at $2,364.40. First support is seen at last week’s low of $2,304.60 and then at $2,300.00. Wyckoff's Market Rating: 7.0.
The silver bulls have the overall near-term technical advantage but are fading again. A price uptrend on the daily bar chart has stalled out. Silver bulls' next upside price objective is closing May futures prices above solid technical resistance at $28.00. The next downside price objective for the bears is closing prices below solid support at $25.00. First resistance is seen at $27.00 and then at this week’s high of and then at $27.44. Next support is seen at $26.50 and then at $26.25. Wyckoff's Market Rating: 6.5
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