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Gold Ends Slightly Up on Corrective Bounce from Recent Downside Pressure

(Kitco News) - Gold prices finished the U.S. day session slightly higher Monday, on a rebound from the selling seen late last week that produced a technically bearish weekly low close on Friday. The gold bulls had faded recently and Monday’s even modest lift was much-needed for them. December Comex gold was last up $1.50 at $1,164.30 an ounce. December Comex silver was last up $0.058 at $15.89 an ounce.

A lower U.S. dollar index to start the trading week was also a mildly bullish “outside market” force working in favor of the precious metals bulls. The other outside market saw crude oil prices weaker Monday, as the oil bears have some technical momentum on their side.

A weak U.S. housing market report on Monday helped to pressure the U.S. dollar.

In overnight news, the closely watched German Ifo business conditions index fell to 108.2 in October from 108.5 in September. However, the number was higher than forecasters expected. The Euro currency saw a modest recovery after a big sell off Friday that drove prices to a 2.5-month low.

European stock markets saw a downside correction Monday, following Friday’s gains that were inspired by an unexpected easing of monetary policy by China’s central bank, and by dovish comments from European Central Bank President Mario Draghi last Thursday. Asian stock markets were mostly firmer Monday, in the wake of the China central bank cutting its interest rates last Friday.

This is an extra important week for the marketplace. Featured is the Federal Reserve’s FOMC monetary policy meeting that begins on Tuesday and ends Wednesday afternoon. Also, the big Chinese government five-year planning meeting began on Monday and lasts until Thursday.

Technically, December gold futures prices closed near mid-range on a corrective rebound from recent selling pressure. The gold bulls still have the slight overall near-term technical advantage but need to show more power soon to keep it. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the October high of $1,191.70. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,150.00. First resistance is seen at today’s high of $1,169.60 and then $1,175.00. First support is seen at last week’s low of $1,158.60 and then at $1,156.40. Wyckoff’s Market Rating: 5.5

December silver futures prices closed nearer the session high. The silver market bulls still have the slight near-term technical advantage but need to show more power soon to keep it. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the October high of $16.195 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.37. First resistance is seen at $16.00 and then at $16.195. Next support is seen at today’s low of $15.77 and then at last week’s low of $15.61. Wyckoff's Market Rating: 5.5.

December N.Y. copper closed up 75 points at 235.75 cents today. Prices closed near mid-range today. Mild short covering in a bear market was featured. Copper bears still have the overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the September high of 249.30 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the August low of 220.25 cents. First resistance is seen at 240.00 cents and then at last week’s high of 241.80 cents. First support is seen at last week’s low of 233.05 cents and then at 230.00 cents. Wyckoff's Market Rating: 2.5.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff

 

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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