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Gold Lower; Bulls Frustrated by Lack of Safe-Haven Demand

(Kitco News) - Gold ended the U.S. day session lower Monday as prices have given back most of last week’s gains. The yellow metal saw no significant safe-haven demand despite a sell-off in most world stock markets Monday, including sharp losses in the U.S. stock indexes.
Also bearish for the precious metals are ideas a strengthening U.S. economy will support a continued rise in the value of the U.S. dollar—even though the dollar index was weaker on this day. December Comex gold was last down $13.60 at $1,132.00 an ounce. December Comex silver was last down $0.566 at $14.545 an ounce.

Most major world stock markets saw seeing selling pressure to start the trading week. More downbeat economic data coming from China, the world’s second-largest economy, in part spurred the downside price action in equities markets. Industrial profits in China were reported down 8.8% in August, from a year ago. China’s Shanghai stock index was slightly higher on the day, however.

The marketplace is still obsessed with the timing of the next interest rate hike from the U.S. Federal Reserve. Remarks from Fed Chair Janet Yellen late last week fell into the hawkish monetary policy camp, as Yellen appeared to lay out a case for a U.S. Fed funds rate rise yet this year. Recent upbeat U.S. economic data, including last Friday’s stronger-than-expected GDP report, also fall into the camp of monetary policy hawks and U.S. dollar bulls. Federal Reserve Bank of New York President William Dudley chimed in Monday, saying he, too, thinks the Fed will raise interest rates yet this year.

In other overnight news, reports said the government of Switzerland is investigating seven major banks that may have manipulated the price of gold, silver and other precious metals. The focus is on the spreads between the bid and ask prices for the metals.

China’s gold imports from Hong Kong and Switzerland doubled in August versus the year-ago period. Demand for gold coming from India was also strong, said the report that was issued by Barclays Monday.

The London P.M. gold fix today was $1,131.05 versus the previous London A.M. fixing of $1,137.50.

Technically, December gold futures prices closed nearer the session low. Gold bears have the overall near-term technical advantage and the bulls have faded quickly. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,156.40. Bears' next near-term downside price breakout objective is closing prices below solid technical support at the September low of $1,097.70. First resistance is seen at $1,141.50 and then at today’s high of $1,147.80. First support is seen at today’s low of $1,127.30 and then at last week’s low of $1,120.50. Wyckoff’s Market Rating: 3.0

December silver futures closed down $0.571 at $14.54 today. Prices closed nearer the session low today and hit a two-week low. Silver bears still have the solid overall near-term technical advantage and gained fresh momentum today. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the September high of $15.435 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the August low of $13.95. First resistance is seen at $15.00 and then at last week’s high of $15.245. Next support is seen at today’s low of $14.47 and then at today’s low of $14.245. Wyckoff's Market Rating: 3.0.

December N.Y. copper closed down 330 points at 225.05 cents today. Prices closed nearer the session low and hit a four-week low today. Copper bears have the solid 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 today’s high of 230.25 cents and then at 232.50 cents. First support is seen at today’s low of 223.20 cents and then at 220.25 cents. Wyckoff's Market Rating: 1.0.

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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