Gold sinks to 4-week low, new bullish inputs needed to jumpstart rally
(Kitco News) - Gold prices are lower in early-afternoon U.S. trading Tuesday, sinking to a four-week low. There’s an old trading adage that says a strong bull market needs to be fed fresh bullish news on a regular basis. Now, the safe-haven metals are in need of a dose of bullish news. The technicals in gold and silver remain overall bullish, but more selling pressure in the near term would produce some chart damage. December gold futures were last down $10.60 an ounce at 1,500.60. December Comex silver prices were last up $0.023 at $18.195 an ounce.
Generally, there remains low risk aversion in the world marketplace at present. However, there are geopolitical elements that could quickly come to the front burner, including civil unrest in Hong Kong and U.S.-Iran tensions. Also, reports today said North Korea has launched more missiles.
In overnight news, China’s consumer price index rose 2.8% in August, year-on-year, which was the same rate as July. The rise was more than expected and was led by surging pork prices. China’s producer prices were down 0.8% in August, year-on-year, due in part to the negative effects of China’s trade war with the U.S. China’s central bank eased its monetary policy last week and is likely to do it again in the near term.
Focus is turning to the monetary policy meeting of the European Central Bank on Thursday, at which time the ECB is expected to cut interest rates, pushing them further into negative territory.
The key “outside markets” today see Nymex crude oil prices near steady and trading around $57.80 a barrel. Thursday sees a meeting of the OPEC oil cartel. Oil prices have rallied recently on ideas OPEC nations will continue to constrict their spigots. The U.S. dollar index is firmer in midday U.S. trading today.
Technically, December gold futures prices closed near mid-range and hit a four-week low today. The bulls still have the overall near-term technical advantage but need to show some fresh power soon to keep alive a three-month-old uptrend in place on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the September high of $1,566.20. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,475.00. First resistance is seen at today’s high of $1,509.10 and then at $1,520.00. First support is seen at today’s low of $1,494.20 and then at $1,485.00. Wyckoff's Market Rating: 6.5
December silver futures prices closed nearer the session high. The silver bulls still have the overall near-term technical advantage. A three-month-old uptrend is still in place on the daily bar chart, but the bulls need to show fresh power soon to keep it alive. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $19.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.50. First resistance is seen at this week’s high of $18.40 and then at $18.58. Next support is seen at today’s low of $17.855 and then at $17.75. Wyckoff's Market Rating: 6.5.
December N.Y. copper closed down 40 points at 262.35 cents today. Prices closed near mid-range. The copper bears have the overall near-term technical advantage. However, recent good gains suggest this market has put in a bottom. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 275.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the September low of 248.20 cents. First resistance is seen last week’s high of 264.90 cents and then at 267.50 cents. First support is seen at today’s low of 260.25 cents and then at 258.75 cents. Wyckoff's Market Rating: 3.0.