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Gold Down; Markets Shrug Off Latest N. Korea Threat

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(Kitco News) - Gold prices are modestly lower in early New York trading Thursday. The market is continuing to see a corrective pullback from recent gains that saws prices last week score a 12-month high. December Comex gold was last down $3.60 an ounce at $1,324.40. December Comex silver prices were last down $0.137 at $17.735 an ounce.

The marketplace is so far showing a muted reaction to the news just out that North Korea has threatened to “sink Japan” with its nuclear missiles and also to reduce the U.S. mainland “to ashes.” Still, this is another reminder of the still high tensions between the U.S. and North Korea, which will continue to limit selling interest in the safe-haven gold market.

Recent rallies in world stock markets have also been a negative for the gold market. Global stock markets were mostly weaker overnight, however. Some weak economic data coming out of China dented investor risk appetite. Industrial production, fixed-asset investment and retail sales were all lower than expected in August.

The conclusion of the Bank of England’s regular monetary policy meeting Thursday saw the BOE make no changes in its monetary policy. However, the BOE’s statement at the end of the meeting were deemed to be hawkish and suggested the central bank wants to raise interest rates sooner rather than later.

The key U.S. economic data point of the week is Thursday’s consumer price index report for August. That report is expected to show a rise of 0.4%. Notions are growing that low inflation in the U.S. and the Euro zone will keep the Federal Reserve and European Central Bank from tightening their monetary policies as soon as they would like.

The key outside markets on Thursday morning see the U.S. dollar index lower. Meantime, Nymex crude oilfutures are higher this morning.

Other U.S. economic data due for release Thursday includes the weekly jobless claims report and real earnings.

Live 24 hours gold chart [Kitco Inc.]

Technically, December gold futures bulls still have the firm overall near-term technical advantage, but they have faded this week. A two-month-old uptrend is still in place on the daily bar chart. Bulls’ next upside technical objective is pushing and closing prices above chart resistance at last week’s high of $1,362.40. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,300.00. First resistance is seen at the overnight high of 1,330.90 and then at $1,340.00. First support is seen at the overnight low of $1,322.20 and then at $1,320.00. Wyckoff’s Market Rating: 7.0

Live 24 hours silver chart [ Kitco Inc. ]

December silver bulls have the overall near-term technical advantage. Silver prices are in a nine-week-old uptrend on the daily bar chart. The next upside price breakout objective is closing futures prices above solid technical resistance at $18.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.25. First resistance is seen at the overnight high of $17.86 and then at $18.00. Next support is seen at $17.50 and then at $17.34. Wyckoff's Market Rating: 6.5.

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 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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