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Gold Hits 1.5-Yr. Low Below $1,200; FX Turmoil No Support

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(Kitco News) - Gold prices are down and hit a nearly 1.5-year low as they fell below key chart support at $1,200.00 in early U.S. trading Monday. Silver futures prices dropped to a more-than-two-year low overnight. A surging U.S. dollar index is trumping currency market turmoil to drive the precious metals markets lower. December gold futures were last down $11.90 an ounce at $1,207.10. September Comex silver was last down $0.13 at $15.165 an ounce.

It's a risk-off day in the world marketplace to start the trading week Monday, as global stock markets were lower overnight. U.S. stock indexes are also pointed toward lower openings when the New York day session begins.

The stock and currency markets are roiled again today, with focus on a crumbling Turkish lira and that country's financial troubles. The Lira was down as much as 10% today following sharp losses last week. Turkey's government has so far done or said little to stem the drop in the lira.

The Indian rupee, South African rand and Mexican peso are included in those secondary currencies also getting hit hard today by an appreciating U.S. dollar. The U.S. dollar index rose to another 13-month high today, on safe-haven demand.

The marketplace is worried about the Turkish lira's severe depreciation expanding into a contagion of secondary world currencies.  

Frustrating for the gold and silver market bulls is the fact their metals are getting no benefit from safe-haven demand amid the keener uncertainty in the world marketplace.

In other news, China announced late Friday that it will not adopt a policy of devaluing its currency, the yuan, to counter the negative effects of a trade war with the U.S.

There is no major U.S. economic data due for release Monday.

Live 24 hours gold chart [Kitco Inc.]

Technically, gold bears have the solid overall near-term technical advantage amid a price downtrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close in December futures above solid resistance at $1,230.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,150.00. First resistance is seen at this $1,212.50 and then at the overnight high of $1,221.40. First support is seen at $1,200.00 and then at $1,190.00. Wyckoff's Market Rating: 1.0

Live 24 hours silver chart [ Kitco Inc. ]

September silver futures bears have the solid overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $15.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.00. First resistance is seen at today' high of $15.345 and then at $15.50. Next support is seen at $15.00 and then at $14.75. Wyckoff's Market Rating: 1.0.

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.

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