Gold, Silver Prices At 4-Week Lows As Greenback Rallies
(Kitco News) - Gold Prices are lower and scored a four-week low in early U.S. trading Wednesday. A strong rebound in the U.S. dollar index this week (prices hit a five-week high overnight) is pushing the precious metals price south.Silver prices are also at a four-week low. December Comex gold was last down $9.70 an ounce at $1,292.00. December Comex silver prices were last down $0.028 at $16.855 an ounce.
Risk appetite has returned to the marketplace at mid-week as world stock markets were mostly firmer overnight. U.S. stock indexes are also pointed toward modestly higher openings when the New York day session begins.
Federal Reserve Chair Janet Yellen delivered a speech Tuesday that sounded an arguably hawkish tone on U.S. monetary policy, and an upbeat tone on the U.S. economy. The world equity markets have taken this as a positive sign that a strengthening U.S. economy and rising inflation will help the other major industrialized countries’ economic growth prospects, as well as reignite some wanted inflation.
The U.S. dollar bulls are on a roll this week, as the U.S. dollar index is higher and hit a five-week high overnight. A bullish head-and-shoulders bottom reversal pattern has formed on the daily bar chart for the USDX, which is a technical clue that a market bottom is in place. The appreciating U.S. currency has not only been bearish for the precious metals, but also for several other raw commodities that are priced in U.S. dollars on world markets.
Meantime, the Euro currency hit a five-week low against the U.S. dollar Wednesday. There are chart clues the Euro has put in a near-term market top.
The other key outside market on Wednesday morning sees Nymex crude oil futures near steady after hitting a four-month high Tuesday. The oil bulls have the near-term technical advantage and still have some momentum. However, there are stiff chart resistance levels just overhead in the crude oil market.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, durable goods orders, pending home sales and the weekly DOE liquid energy stocks report.
Technically, December gold futures bulls have lost their slight overall near-term technical advantage. Bulls’ next upside technical objective is pushing and closing prices above chart resistance at $1,320.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,275.00. First resistance is seen at 1,300.00 and then at $1,307.00. First support is seen at the overnight low of $1,288.80 and then at $1,281.30. Wyckoff’s Market Rating: 5.0
December silver bulls and bears are also on a level overall near-term technical playing field. However, prices have been trending lower for three weeks. The next upside price breakout objective is closing futures prices above solid technical resistance at this week’s high of $17.675 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at $17.00 and then at this week’s high of $17.295. Next support is seen at $16.80 and then at $16.645. Wyckoff's Market Rating: 5.0.