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Gold, silver sink on bearish outside markets, hawkish Fed-speak

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(Kitco News) - Gold and silver prices are solidly lower in midday U.S. trading Thursday. A strong rally in the U.S. dollar index and sharp losses in the crude oil market on this day are bearish outside market forces pushing the metals markets lower. Hawkish comments from Federal Reserve officials also spooked the precious metals market bulls. December gold was last down $15.10 at $1,760.70 and December silver was down $0.604 at $20.91.

The gold and silver markets extended losses Thursday morning after two Federal Reserve officials sounded a still aggressively hawkish tone on U.S. monetary policy. St. Louis Fed President James Bullard said the central bank needs to raise interest rates higher to restrict the economy in order to bring down problematic inflation. Bullard said he's targeting a minimum of another 125 basis points in rate hikes, which would bring the Fed funds target range to 5.00-5.25%.  Meantime, Kansas City Fed President Esther George earlier said, “I’m looking at a labor market that is so tight, I don’t know how you continue to bring this level of inflation down without having some real slowing, and maybe we even have contraction in the economy to get there.”

U.S. stock indexes are lower at midday, following the hawkish comments from the Fed officials. Nymex crude oil prices are sharply lower and trading around $82.00 a barrel, pressured in part by the Fed officials’ comments and also by worries about slowing economic growth in China. The yield on the benchmark U.S. 10-year Treasury note is presently 3.76%. Bond yields up-ticked after the Fed officials’ remarks.

A bevy of U.S. economic data released today was a mixed bag for the marketplace.

Live 24 hours gold chart [Kitco Inc.]

Technically, December gold futures saw profit taking was featured after prices hit a three-month high Tuesday. The gold futures bulls still have the slight overall near-term technical advantage and are working on a fledgling price uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,618.30. First resistance is seen at today’s high of $1,777.60 and then at this week’s high of $1,791.80. First support is seen at $1,750.00 and then at $1,738.70. Wyckoff's Market Rating: 5.5.

Live 24 hours silver chart [ Kitco Inc. ]

December silver futures also saw profit taking after prices hit a 4.5-month high Tuesday. The silver bulls still have the overall near-term technical advantage. Prices are in a choppy 2.5-month-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at this week’s high of $22.38. The next downside price objective for the bears is closing prices below solid support at $19.00. First resistance is seen at today’s high of $21.535 and then at $22.00. Next support is seen at today’s low of $20.785 and then at $20.50. Wyckoff's Market Rating: 6.0.

December N.Y. copper closed down 875 points at 368.60 cents today. Prices closed near the session low today on more profit taking after hitting a four-month high Monday. The copper bulls have the slight overall near-term technical advantage but are fading now. Prices are still in a six-week-old uptrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 400.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 330.00 cents. First resistance is seen at today’s high of 377.25 cents and then at Wednesday’s high of 382.35 cents. First support is seen at 365.00 cents and then at 360.00 cents. Wyckoff's Market Rating: 5.5.

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.