Gold down on technical selling ahead of U.S. CPI

(Kitco News) - Gold prices are moderately down and hit a three-week low in midday U.S. trading Tuesday. Chart-based selling was featured amid bearish technicals. Metals traders are anxiously awaiting a U.S. inflation report on Wednesday morning. December gold was last down $9.90 at $1,937.50 and December silver was down $0.002 at $23.38.

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Traders and investors are waiting for the U.S. consumer price index report for August, due out Wednesday morning. The CPI is expected to be up 4.3%, year-on-year, versus a 4.7% rise in the July report. Look for more active trading in many markets in the immediate aftermath of the CPI report—especially if it’s a miss from market expectations.

U.S. stock indexes are mixed to weaker at midday. Equities traders are not quite half-way through what can be the tumultuous month of September, and the bulls are holding their own--so far. Six more weeks to go before the bulls can breathe easier, however, as October can also be a rocky month for the stock markets.

The European Central Bank also holds its regular monetary policy meeting Thursday and is expected to slightly raise its main interest rate by 0.25 percent.

The key outside markets today see the U.S. dollar index slightly higher. Nymex crude oil prices are higher and trading around $89.00 a barrel. The benchmark U.S. Treasury 10-year note yield is presently fetching 4.28%.

Technically, December gold futures prices hit a three-week low today. Bears have the firm overall near-term technical advantage. A four-month-old downtrend on the daily bar chart has been restarted. Bulls’ next upside price objective is to produce a close above solid resistance at the September high of $1,980.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the August low of $1,913.60. First resistance is seen at today’s high of $1,947.50 and then at this week’s high of $1,954.60. First support is seen at today’s low of $1,929.90 and then at $1,925.00. Wyckoff's Market Rating: 3.0.

December silver futures prices hit a three-week low early on today. The silver bears have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at last week’s high of $24.655. The next downside price objective for the bears is closing prices below solid support at the August low of $22.585. First resistance is seen at this week’s high of $23.515 and then at $24.00. Next support is seen at today’s low of $23.11 and then at $23.00 Wyckoff's Market Rating: 3.5.

December N.Y. copper closed down 90 points at 379.80 cents today. Prices closed nearer the session high. The copper bears have the slight overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the September high of 390.85 cents. The next downside price objective for the bears is closing prices below solid technical support at the August low of 367.00 cents. First resistance is seen at 385.00 cents and then at 388.00 cents. First support is seen at 375.00 cents and then at last week’s low of 371.15 cents. Wyckoff's Market Rating: 4.5.

By

Jim Wyckoff

For Kitco News

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