Gold near steady, shows little initial reaction to FOMC minutes

Gold and silver prices are trading not far from unchanged in afternoon U.S. trading Wednesday, after huge day for U.S. economic data that produced not much markets reaction. December gold was last up $0.50 at $1,784.30 and December Comex silver was last up $0.04 at $23.475 an ounce.

The just-released FOMC minutes from the last meeting of the Fed's monetary policy-setting committee showed FOMC members getting more concerned about rising inflationary pressures and now believe that inflation will hang around longer than previously thought. Inflation will subside significantly in 2022, believes the committee members. Some Fed officials wanted a faster pace of “tapering” of the Fed's bond-buying program. Others were worried about elevated asset valuations. The members said labor participation would likely be lower in the coming months because of early retirements. Markets showed little initial reaction to the FOMC minutes.

It was a very busy day for U.S. data releases Wednesday. The big batch of data was a mixed bag, overall, but generally upbeat, and had little impact on the metals or other markets. Traders and investors in the U.S. apparently were more focused on the Thanksgiving holiday feasting.

Global stock markets were mixed in overnight trading. The U.S. stock indexes are mixed in afternoon trading.

Rising Covid-19 cases in Europe and Asia continue to prompt risk aversion in the marketplace. Austria is on a virtually complete lockdown and German officials are warning Covid cases are rising at an alarming rate.

Traders are closely watching the Turkish lira this week, which has dropped sharply to a record low against the U.S. dollar. Turkey's president forced its central bank to lower its main interest rate recently despite rising inflation concerns. That sent the lira into a downward spiral. The lira did rebound a bit Wednesday.

The key outside markets today see the U.S. dollar index higher and hitting another 15-month high. Nymex crude oil prices are near steady and trading around $78.50 a barrel. The yield on the U.S. Treasury 10-year note is presently fetching 1.657%.

Technically, December gold futures prices hit a three-week low today. Bulls still have the slight overall near-term technical advantage but have faded badly this week and need to show fresh power soon to keep their edge. A seven-week-old uptrend on the daily bar chart has stalled out. Bulls' next upside price objective is to produce a close above solid resistance at this week's high of $1,850.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,758.50. First resistance is seen at today's high of $1,796.20 and then at $1,800.00. First support is seen at today's low of $1,777.40 and then at $1,758.50. Wyckoff's Market Rating: 5.5

December silver futures bears have the overall near-term technical advantage. A seven-week-old uptrend on the daily bar chart has stalled out. Silver bulls' next upside price objective is closing prices above solid technical resistance at the November high of $25.49 an ounce. The next downside price objective for the bears is closing prices below solid support at the November low of $23.045. First resistance is seen at $24.00 and then at Tuesday's high of $24.34. Next support is seen at this week's low of $23.28 and then at $23.045. Wyckoff's Market Rating: 4.0.

December N.Y. copper closed up 390 points at 446.20 cents today. Prices closed nearer the session high today and hit a four-week high. The copper bulls have gained the slight overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 460.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the November low of 419.15 cents. First resistance is seen at today's high of 449.10 cents and then at 455.00 cents. First support is seen at today's low of 439.15 cents and then at this week's low of 435.20 cents. Wyckoff's Market Rating: 5.5.

By Jim Wyckoff

For Kitco News

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