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Gold Prices Near Steady

Gold prices are near steady in early U.S. trading Wednesday and showed no reaction to the release of a major U.S. economic report.

The just released second estimate of third-quarter U.S. GDP showed an annual growth rate of 3.5%, which was right in line with market expectations. The price index (an inflation indicator) was up 1.7% on an annual basis, which was also in line with forecasts. Gold and silver prices showed no significant reactions to the report.

European stock markets were also mostly higher overnight. Asian stock indexes were also mostly firmer. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. The U.S. stock index bulls are having a good week, so far, but the losses the past several weeks still suggest major market tops are in place.

Focus this week is on the upcoming Group of 20 meetings that begin Friday in Argentina and will feature a face-to-face meeting between the U.S. and Chinese presidents on Saturday. The world’s two largest economies are locked in a heated trade war. President Trump made hardline comments on the matter Monday, but his chief economic advisor on Tuesday sent mixed signals on any hopes for an agreement this weekend. There is general agreement that the trade war is hurting China’s economy much more than the U.S. economy.

On tap today is a midday speech by Federal Reserve Board governor Jerome Powell to the Economic Club of New York. Traders will be watching to see if Powell gives any clues on the timing and direction of the Fed’s monetary policy moves.

The key outside markets today find Nymex crude oil futures prices slightly lower. Prices Monday hit a 13-month low of $50.10. Crude prices are down around 30% following the recent sharp declines. A key OPEC oil cartel meeting is scheduled for next week.

The other key outside market today finds the U.S. dollar index trading near steady but not far below this month’s 1.5-year high.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the advance economic indicators report, the second estimate of third-quarter GDP, new residential sales, the Richmond Fed business survey, and the weekly DOE liquid energy stocks report.

Technically, gold bears have the overall near-term technical advantage and gained some downside momentum from Tuesday’s price pressure. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at the November high of $1,252.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the November low of $1,202.40. First resistance is seen at Tuesday’s high of $1,231.70 and then at this week’s high of $1,234.50. First support is seen at $1,213.00 and then at $1,210.00. Wyckoff's Market Rating: 3.0

March silver futures bears have the solid overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the October high of $15.055 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the November low of $13.985. First resistance is seen at Tuesday’s high of $14.405 and then at this week’s high of $14.545. Next support is seen at this week’s low of $14.185 and then at $14.00. Wyckoff's Market Rating: 2.0.