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Gold pounded to 9-mo. low on chart-based selling

Kitco News

(Kitco News) - Gold prices are lower and hit a nine-month low in midday U.S. trading Thursday. Silver prices are slightly up. The near-term chart posture for the gold market has deteriorated significantly this week, which is inviting the technical traders to the short side of the market. The U.S. dollar index on Thursday took a respite from its ascent but remains overall strong. U.S. Treasury yields continue to rise. Both are bearish outside market elements for the metals markets. December gold was last down $8.40 at $1,882.50 and December silver was up $0.051 at $22.77.

U.S. stock indexes are higher at midday on corrective bounces after hitting four-month lows Wednesday. Risk appetite remains tepid at best late this week as the U.S. government shutdown this weekend looms. The Associated Press reports: "As the Senate marches ahead with a bipartisan approach to prevent a government shutdown, House Speaker Kevin McCarthy is back to square one — asking his hard-right Republicans to do what they have said they would never do: approve their own temporary House measure to keep the government open." Goldman Sachs reportedly estimates the shutdown will probably last three weeks.

A Barron's headline today reads: "Forget the shutdown. Why stocks have plenty more to worry about." The story goes on to say the main reason for recent stock market declines is changing perceptions about interest rates. Now the thinking in much of the marketplace is higher for longer, maybe much longer, including potential stagflation, as pointed out by JP Morgan CEO Jamie Dimon in the press recently.

Striking union workers in the U.S., led by the United Auto Workers, are also starting to weigh more heavily on trader and investor sentiment.

Gold could fall to $1,850 and then $1,800 after breaking below August lows

The key outside markets today see the U.S. dollar index weaker on a corrective pullback after hitting a 10-month high on Wednesday. Nymex crude oil prices are weaker and trading around $92.50 a barrel after hitting a 13-month high overnight. A Dow Jones Newswires headline today reads: "Saudi Arabia and Russia win big in gamble on oil production cuts."

Meantime, the benchmark U.S. Treasury 10-year note yield is at a 16-year high this week and presently fetching 4.614%.

Live 24 hours gold chart [Kitco Inc.]

Technically, December gold futures prices hit a nine-month low today. Bears have the solid overall near-term technical advantage. A five-month-old downtrend is in place on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at $1,925.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,850.00. First resistance is seen at today's high of $1,896.80 and then at $1,900.00. First support is seen at today's low of $1,974.50 and then at the February low of $1,883.80. Wyckoff's Market Rating: 1.5.

Live 24 hours silver chart [ Kitco Inc. ]

December silver futures bears have the overall near-term technical advantage. However, there are solid technical support levels just below the market that begin to suggest a market bottom is in place. Silver bulls' next upside price objective is closing prices above solid technical resistance at last week's high of $24.05. The next downside price objective for the bears is closing prices below solid support at $22.00. First resistance is seen at Wednesday's high of $23.12 and then at $23.39. Next support is seen at the September low of $22.555 and then at $22.25. Wyckoff's Market Rating: 3.0.

December N.Y. copper closed up 685 points at 370.50 cents today. Prices closed near the session high and saw short covering. The copper bears still have the firm overall near-term technical advantage. Prices are in a choppy, two-month-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 385.15 cents. The next downside price objective for the bears is closing prices below solid technical support at the May low of 358.60 cents. First resistance is seen at today's high of 371.50 cents and then at 375.00 cents. First support is seen at 365.00 cents and then at this week's low of 362.75 cents. Wyckoff's Market Rating: 2.5.

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.