(Kitco News) - Gold and silver prices are lower near midday Wednesday and hit three-week lows. The precious metals are being pressured by a stronger U.S. economic report that fell into the camp of the U.S. monetary policy hawks. December gold was last down $26.20 at $3,354.70. September silver prices were last down $0.531 at $37.755.

The U.S. economy expanded at an annualized rate of 3% in the second quarter, recovering sharply from a 0.5% contraction in the first quarter and outpacing forecasts of 2.4% growth. It was a strong showing, boosted by a slowdown in imports amid ongoing trade turmoil. The rebound was driven largely by a sharp drop in imports after a first-quarter surge tied to tariff-related stockpiling. Consumer spending also rose in the second quarter, though declines in business investment and exports partially offset the gains. Consumer spending measured via Personal Consumption Expenditures was at 1.4%, even with expectations and significantly above the 0.5% mark from the first quarter. This report will make it tougher for the Federal Reserve to lower interest rates anytime soon.

Traders are awaiting the conclusion of the Federal Reserve’s Open Market Committee (FOMC) meeting that began Tuesday morning and ends this afternoon with a statement and press conference from Fed Chairman Jerome Powell.  The Fed is widely expected to leave its benchmark Fed funds rate range unchanged this week. However, many market watchers think Powell might indicate at this meeting the Fed could lean easier on the Fed’s monetary policy intentions this fall.

The key outside markets today see the U.S. dollar index solidly higher and hit a two-month high. Nymex crude oil futures are firmer and trading around $69.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.4%.  

Technically, December gold futures bulls have the overall near-term technical advantage but have faded. Bulls’ next upside price objective is to produce a close above solid resistance at the July high of $3,509.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,300.00. First resistance is seen at today’s high of $3,389.30 and then at this week’s high of $3,302.40. First support is seen at $3,350.00 and then at $3,325.00. Wyckoff's Market Rating: 6.0.

September silver futures bulls have the firm overall near-term technical advantage. Prices are in an uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $40.00. The next downside price objective for the bears is closing prices below solid support at $36.00. First resistance is seen at $38.00 and then at this week’s high of $38.51. Next support is seen at today’s low of $37.57 and then at $37.00. Wyckoff's Market Rating: 7.0.

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