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Gold prices slumping; more downside coming but where the bleeding will stop

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(Kitco News) -  Gold and silver prices are lower and dropped to three-month lows in early U.S. trading Friday. The safe-haven metals have been hammered this week by rallying world stock markets that saw the U.S. indexes score record highs Thursday. December gold futures were last down $6.70 an ounce at 1,459.70. December Comex silver prices were last down $0.245 at $16.765 an ounce.

Serious near-term technical damage has been inflicted in both gold and silver markets this week, as both have seen bearish downside “breakouts” from sideways trading ranges on the daily bar charts. More price pressure is likely in the near term, with gold likely to find strong support at $1,400.00 that would stop the bleeding. For silver, prices could continue to erode to the $15.50 level before bottoming out.

Asian and European stock indexes were mixed to mostly weaker overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins.

Traders and investors on this day are not quite so confident the U.S. and China are close to signing a partial trade deal. Now reports are saying there is heavy resistance among some inside the Trump administration to acquiesce to China by rolling back trade tariffs on Chinese imports to the U.S. One Trump trade official late Thursday said there is still no agreement in place and the ultimate decision lies with the mercurial President Trump. Much of this week had seen global equity markets in rally mode on notions of a soon-completed “Phase 1” of the U.S.-China trade agreement.

In overnight news, China’s October exports fell 0.9% year-on-year, which was better than the 3.1% drop expected. China’s imports were down 6.4% in October, year-on-year, while a drop of 8.6% was forecast.

A feature in the marketplace this week besides record highs in the U.S. stock indexes is rising U.S. bond yields, which hit a three-month high on Thursday.

The key “outside markets” today see the U.S. dollar index up and at a three-week high. Nymex crude oil prices are lower and trading around $56.15 a barrel.

U.S. economic data due for release Friday includes monthly wholesale trade and the University of Michigan consumer sentiment survey.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bears now have the overall near-term technical advantage. Prices are in a two-month-old downtrend on the daily bar chart and have seen a bearish downside “breakout” from the recent sideways trading range, to suggest still some more price pressure in the near term. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $1,500.00. Bears' next near-term downside price breakout objective is pushing December futures prices below solid technical support at $1,400.00. First resistance is seen at the overnight high of $1,473.90 and then at $1,480.00. First support is seen at the overnight low of $1,457.00 and then at $1,450.00. Wyckoff's Market Rating: 4.5

Live 24 hours silver chart [ Kitco Inc. ]

December silver futures bears also have the overall near-term technical advantage. Prices are in a two-month-old downtrend on the daily bar chart and have seen a bearish downside “breakout” from the recent trading range, to suggest still some more price pressure in the near term. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $18.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at the overnight high of $17.095 and then at $17.25. Next support is seen at the overnight low of $16.66 and then at $16.50. Wyckoff's Market Rating: 4.0.

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