Gold, Silver Prices Rise On More Dovish Federal Reserve

– Gold and silver prices are solidly higher and have notched three-week highs in early U.S. trading Thursday. The precious metals bulls are being fueled by a surprisingly dovish stance taken by the U.S. Federal Reserve on Wednesday afternoon. April gold futures were last up $13.90 an ounce at $1,315.60. May Comex silver was last up $0.247 at $15.57 an ounce.

The world marketplace is still digesting Wednesday afternoon’s Federal Open Market Committee (FOMC) meeting conclusion and Fed Chairman Powell’s press conference. Surprisingly, the Fed took another strong step in the direction of easier U.S. monetary policy. The FOMC statement said the Fed would keep U.S. interest rates unchanged and plans no more rate hikes this year. The statement also said the U.S. labor market remains strong but U.S. economic growth has slowed a bit, as evidenced by slower household spending and lower business investment.

The Fed news dropped the U.S. dollar index, rallied U.S. Treasury prices and has put downside pressure on U.S. and world stock markets. Asian and European stocks were mixed overnight. U.S. stock indexes are also pointed toward weaker openings when the New York day session begins.

U.S. stocks initially were supported on the dovish Fed stance, but then sold off on worries about slowing global economic growth.
Palladium prices hit another record high overnight and are trading above $1,575.00 an ounce.

The world markets are again trying to figure out if the U.S. and China are close to a substantive trade deal. Early-week reports said the U.S. and China were moving closer to a formal trade agreement. U.S. Treasury Secretary Mnuchin and U.S. Trade Representative Lighthizer are traveling to China next week for high-level discussions. However, on Wednesday President Trump said U.S. tariffs on China won’t be lifted right away even if a trade deal is reached soon.

The key outside markets today see the U.S. dollar index solidly higher an upside correction after solid losses and hitting a six-week low Wednesday. The greenback bulls had faded recently. Meantime, Nymex crude oil prices are lower and trading just below $60.00 a barrel. Oil prices hit a four-month high overnight.

U.S. economic reports due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, and leading economic indicators.

Technically, the gold bulls have the overall near-term technical advantage and have gained power late this week. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at the January high of $1,331.30. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at the March low of $1,280.80. First resistance is seen at the overnight high of $1,320.20 and then at $1,325.00. First support is seen at the overnight low of $1,312.50 and then at $1,305.00. Wyckoff’s Market Rating: 7.0

May silver futures bulls have the overall near-term technical advantage and have also gained power late this week. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $16.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the March low of $14.985. First resistance is seen at the overnight high of $15.65 and then at $15.75. Next support is seen at the overnight low of $15.48 and then at this week’s low of $15.22. Wyckoff’s Market Rating: 6.5.