Gold Sharply Lower, Hits 4-Week Low, on Improved Investor Risk Appetite, Bearish Outside Markets

(Kitco News) - Gold prices ended the U.S. day session solidly lower and hit a four-week low Wednesday. The safe-haven metal on this day lost favor in the investment community amid a “risk-on” day in the market place, as world stock markets are generally in rally mode so far this week. December Comex gold was last down $16.70 at $1,104.30 an ounce. December Comex silver was last down $0.17 at $14.585 an ounce.

The key “outside markets” were also in a bearish daily posture for the precious metals Wednesday. Nymex crude oil futures were lower. There are still technical clues crude oil has put in a near-term market bottom. But the crude oil bulls need to step up and show fresh power very soon to keep those clues relevant. The other outside market saw the U.S. dollar index firmer. Trading in the USDX has been choppy recently.

China’s Shanghai stock index closed up 2.3% Wednesday after the Chinese government announced late Tuesday it would implement further measures to stimulate its flagging economy. Japan’s Nikkei stock index was up 7.7% on the day—the biggest daily percentage gain since 2008. European stock markets were also higher Wednesday. U.S. stock indexes were mixed Wednesday afternoon, after posting big gains Tuesday. Look for more volatile trading in the near term, following the recent market turbulence. Rallying stock markets worldwide pull investor interest away from safe-haven gold.

Focus of the marketplace is looking ahead to next week’s Federal Open Market Committee (FOMC) meeting. There is no clear consensus among traders and investors whether the Fed will make an interest rate hike at next week’s meeting, or wait until December, or later.

The London P.M. gold fix today was $1,109.85 versus the previous London A.M. fixing of $1,122.30.

Technically, December gold futures prices closed nearer the session low and hit a four-week low today. Gold bears have the solid overall near-term technical advantage. Prices are in a three-week-old downtrend on the daily bar chart. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,126.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at the July low of $1,073.70. First resistance is seen at $1,110.00 and then at $1,119.90. First support is seen at $1,100.00 and then at $1,090.00. Wyckoff’s Market Rating: 2.0

December silver futures prices closed nearer the session low today. Silver bears have the solid overall near-term technical advantage. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $15.25 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $13.50. First resistance is seen at last week’s high of $14.95 and then at $15.00. Next support is seen at this week’s low of $14.44 and then at last week’s low of $14.39. Wyckoff's Market Rating: 2.0.

December N.Y. copper closed up 55 points at 243.95 cents today. Prices closed nearer the session low and hit another six-week high today. Bulls have gained upside momentum this week to suggest that a market bottom is in place. 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 250.00 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 today’s high of 247.75 cents and then at 250.00 cents. First support is seen at today’s low of 242.45 cents and then at 240.00 cents. Wyckoff's Market Rating: 3.0.

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