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Gold, Silver Prices Hammered By Bearish Outside Market Forces

Kitco News

(Kitco News) - Gold and silver prices ended the U.S. day session sharply lower Monday. Friday’s good gains in both metals that pushed their prices to four-week highs were all taken back and then some today. The pounding was mainly due to bearish outside markets that saw a higher U.S. dollar index, a firmer U.S. stock market and lower crude oil prices. December Comex gold was last down $20.70 an ounce at $1,274.80. December Comex silver was last down $0.513 at $16.86 an ounce.

Gold and silver prices were weaker in overnight dealings, but the selling pressure began to accelerate after the morning release of a very upbeat U.S. leading economic indicators report for October. Pre-placed sell stop orders were triggered in the gold and silver futures markets, to exacerbate the downside action Monday.

Efforts by German Chancellor Angela Merkel to form a coalition government failed over the weekend. This has created some uncertainty, especially in the European markets, as the European Union’s largest economy now appears to be in somewhat of a temporary leadership crisis. This news prompted a sell-off in the Euro currency, which in turn helped to boost the greenback.

Meantime, Nymex crude oil futures prices were lower and are trading just below $56.00 a barrel Monday afternoon. Oil bulls still have the overall near-term technical advantage, but stiff chart resistance layers lie just above the market. Traders are looking ahead to next week’s OPEC meeting.

The U.S. stock indexes were firmer in afternoon trading Monday, which was also a negative for the competing asset class, precious metals.

Most markets will likely see lower volumes as the trading week progresses, what with the U.S. Thanksgiving Day holiday on Thursday. The Friday after Thanksgiving is typically one of the slowest trading days of the year.

Live 24 hours gold chart [Kitco Inc.]

Technically, December gold futures prices closed nearer the session low today. While no serious near-term chart damage was inflicted today, the bullish technical momentum the bulls gained on Friday was all lost today. Good follow-through selling pressure in gold prices on Tuesday would produce some serious near-term technical damage. Gold prices are once again back in a sideways and choppy trading range on the daily bar chart. Bulls and bears are also back on a level overall near-term technical playing field. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the October low of $1,262.80. First resistance is seen at $1,280.00 and then at $1,285.00. First support is seen at last week’s low of $1,269.70 and then at $1,262.80. Wyckoff's Market Rating: 5.0

Live 24 hours silver chart [ Kitco Inc. ]

December silver futures prices closed near the session low today and took back all of last week’s gains. Prices on Friday hit a four-week high. The silver bulls and bears are back on a level overall near-term technical playing field. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the October low of $16.345. First resistance is seen at $17.00 and then at $17.25. Next support is seen at $16.60 and then at $16.50. Wyckoff's Market Rating: 5.0.

December N.Y. copper closed up 250 points at 309.20 cents today. Prices closed near the session high today. The copper bulls still have the overall near-term technical advantage. However, prices have been trending lower for five weeks. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the September high of 317.85 cents. The next downside price objective for the bears is closing prices below solid technical support at 300.00 cents. First resistance is seen at 310.00 cents and then at last week’s high of 313.65 cents. First support is seen at today’s low of 304.95 cents and then at last week’s low of 303.15 cents. Wyckoff's Market Rating: 6.0.

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.