Gold prices are lower again in early trading Wednesday. The yellow metal is being pressured this week in part by a dearth of new, bullish fundamental developments. The safe-haven bid seen in the gold market the past week or so has faded way. The gold market bulls still possess the overall near-term technical advantage. April gold was last down $11.60 at $1,347.40 an ounce. Spot gold was last quoted down $9.20 at $1,346.75. May Comex silver last traded down $0.062 at $20.80 an ounce.
Focus of the market place is on the U.S. Federal Reserve’s Open Market Committee (FOMC) meeting that ends Wednesday afternoon with a statement. Fed Chair Janet Yellen will then deliver her first press conference. It is expected the FOMC will continue on its “tapering” program, whereby monthly bond purchases are whittled down by $10 billion a month. Recent U.S. economic data has been a mixed bag, which is making it tougher for the market place to read what the Fed’s intentions might be. There could be some markets volatility following the FOMC statement and during Yellen’s press conference. It would be a surprise if gold received any significant bullish impetus from the Fed statement or Yellen press conference.
There are rumors floating around Wednesday that another Chinese corporation is in default on an interest rate payment on its bonds. However, there has been no confirmation of such by China. Still, traders and investors are wondering if “where there’s smoke, there’s fire.” A few weeks ago the first corporate bond default occurred in China. China’s financial system has been suspect for quite some time.
The Crimea region of Ukraine has been annexed by Russia, but such has not been met by major violence in the Ukraine--at least not yet. Also, the threatened U.S. and European Union sanctions have so far not been as tough as some expected. These developments have assuaged the market place so far.
The gold market sold off and stock indexes rallied Tuesday when Russian President Vladimir Putin said Russia will not seek to annex other regions of Asia. Many doubt Putin’s word on the matter. Still, this geopolitical incident has died down from a market place perspective, and that’s been bearish for safe-haven gold. But the Russia-Ukraine situation is still far from stable. Any escalation of tensions in Ukraine or further incursions into Ukraine from Russia would quickly put keen risk-aversion right back into the market place.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly DOE energy stocks report and the FOMC statement.
Wyckoff’s Daily Risk Rating: 6.0 (The Ukraine situation has for the moment de-escalated and has become a tertiary market factor.)
(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off), and 5 being neutral.
The London A.M. gold fix is $1,346.00 versus the P.M. fixing of $1,355.75.
Technically, April gold futures prices are still in a 2.5-month-old uptrend on the daily bar chart and seeing a decent corrective pullback after hitting a six-month high Monday. The gold still bulls have the overall near-term technical advantage, but need to step up and show some fresh power soon. Bulls’ next upside near-term price breakout objective is to produce a close above technical resistance at this week’s high of $1,392.60. Bears' next near-term downside breakout price objective is closing prices below technical support at the March low of $1,326.60. First resistance is seen at $1,350.00 and then at the overnight high of $1,360.20. First support is seen at $1,340.00 and then at $1,330.00.
May silver futures bears have the near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the March high of $21.74 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the March low of $20.61. First resistance is seen at the overnight high of $20.965 and then at Tuesday’s high of $21.25. Next support is seen at $20.61 and then at $20.50.
| TIME | |||||
|---|---|---|---|---|---|
| Sydney | Tokyo | Ha Noi | HongKong | LonDon | NewYork |
| Prices By NTGOLD | ||
|---|---|---|
| We Sell | We Buy | |
| 37.5g ABC Luong Bar | ||
| 4,593.50 | 4,243.50 | |
| 1oz ABC Bullion Cast Bar | ||
| 3,822.00 | 3,482.00 | |
| 100g ABC Bullion Bar | ||
| 12,195.60 | 11,245.60 | |
| 1kg ABC Bullion Silver | ||
| 1,651.90 | 1,301.90 | |
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