Gold and silver prices plummeted sharply, hitting near-daily lows during midday U.S. trading on Tuesday. Gold stumbled to a three-week low, while silver hit a four-week low, under the weight of a potentially more hawkish stance from major central banks in their ongoing meeting.
The U.S. Federal Reserve’s Open Market Committee commenced its meeting today, stirring anticipation among investors. While no immediate changes in monetary policy are foreseen, all eyes are on Fed Chair Jerome Powell’s statement and subsequent press conference tomorrow. The recent uptick in U.S. inflation has reshaped market expectations regarding potential rate adjustments, with some analysts pushing back predictions for rate cuts.
A headline in the Wall Street Journal suggests that the Fed is gearing up to maintain higher rates for an extended period, a sentiment echoed by respected reporter Nick Timiraos. His analysis underscores the Fed’s intention to apply significant pressure on U.S. economic activity, a stance likely to persist longer than previously envisaged.
CNBC’s Steve Liesman contributes to the narrative, indicating a notable 22% probability in the market for a rate hike preceding any potential cuts. This sentiment underscores the evolving dynamics within the financial landscape, shaping investor sentiment.
Attention also turns to the upcoming U.S. jobs report from the Labor Department, due Friday, which could further influence market sentiment and expectations regarding monetary policy.
In the broader financial context, the U.S. dollar index exhibits strength, adding pressure on precious metals. Simultaneously, Nymex crude oil prices experienced a downturn, trading around $81.75 a barrel, while the yield on the 10-year U.S. Treasury note climbed to 4.657%. These factors collectively contribute to a bearish outlook for the precious metals market on this trading day.
Today, the price of June gold futures dropped to the lowest point it’s been in three weeks. Right now, the folks who want gold prices to go up (the bulls) still have the upper hand in the short term, but they’re not as strong as before. A trend that has been going up for about two and a half months on the daily chart suddenly stopped today. Also, there’s a small pattern on the chart that suggests prices might keep going down for a bit.
If the bulls want to keep pushing the price up, their goal is to get it to go above $2,400.00. But if the bears (the people who want prices to go down) get their way, they’ll want to see prices drop below $2,200.00. Right now, the first level where it might be harder for the price to go up is at $2,325.00, and then at $2,350.00. On the flip side, the first level where the price might find some support is at $2,300.00, and then at $2,280.00. According to Wyckoff’s Market Rating, the current situation is rated 7.0.
Today, July silver futures prices reached a low not seen in four weeks. While the silver bulls still have some control over the short-term direction, their strength is waning. A positive trend that lasted for about two months on the daily chart has been erased, replaced by a downward trend line. The next target for silver bulls is to achieve closing prices above a strong resistance level at $28.00, while the bears aim to push prices below solid support at $25.00. Initial resistance levels are expected at $27.00 and $27.50, with support anticipated at $26.50 and $26.25. According to Wyckoff’s Market Rating, the current situation is rated 6.0.
Meanwhile, July N.Y. copper experienced a significant decline of 1,095 points, closing at 456.70 cents. Despite starting the day at a two-year high, prices dropped sharply, resulting in a bearish “outside day” down pattern. Nonetheless, the copper bulls maintain a strong overall advantage in the short term, supported by a positive trend that has persisted for 2.5 months on the daily chart. The next objective for copper bulls is to surpass and close above a firm resistance level at 475.00 cents, while the bears aim for prices to fall below solid support at 430.00 cents. Initial resistance levels are observed at 465.00 cents and today’s high of 469.45 cents, with support anticipated at 450.00 cents and 445.00 cents. Wyckoff’s Market Rating for copper currently stands at 7.5.
