(Kitco News) - Gold and silver prices are sharply lower in midday U.S. trading Thursday, on heavy (but not unexpected) profit taking after recent gains that pushed gold futures to a record high and silver a 14-year earlier today. A rally in the U.S. dollar index and lower crude oil prices today are bearish daily “outside market” elements for the two metals. December gold was last down $47.20 at $3,850.00. December silver prices were down $1.674 at $46.015.
I could find no fresh, major fundamental news to account for today’s sell offs in gold and silver. Today’s big “outside days” down in gold and silver futures—whereby today’s highs are higher and today’s lows are lower than yesterday’s daily trading ranges do qualify as bearish “key reversals” down on the daily bar charts. These are early technical clues that market tops are now in place.
The U.S. government shutdown is into its second day and the Trump administration is raising the stakes by halting $18 billion in infrastructure funding and signaling a willingness to fire thousands of federal workers. “The administration's moves have suggested a hardening of positions, which could require one side to make bigger concessions to get the federal government back to work, and some Republicans have expressed concerns that the strategy could backfire,” said a Bloomberg report. The shutdown could have significant economic impacts, with the Congressional Budget Office estimating a cost of $400 million per day in lost compensation, and some economists warning that mass firings could sap corporate confidence and reduce capital investments, said Bloomberg. The shutdown is prompting some risk aversion in some of the marketplace, even though the U.S. stock indexes hit record highs overnight.
Technically, December gold futures bulls still have the overall near-term technical advantage. However, today’s bearish key reversal down is one clue that a market top is in place. Bulls’ next upside price objective is to produce a close above solid resistance at $4,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,750.00. First resistance is seen at $3,900.00 and then at today’s contract/record high of $3,923.30. First support is seen at today’s low of $3,842.80 and then at $3,800.00. Wyckoff's Market Rating: 8.0.
December silver futures bulls still have the overall near-term technical advantage. However, today’s bearish key reversal down is one clue that a market top is in place. Silver bulls' next upside price objective is closing prices above solid technical resistance at $50.00. The next downside price objective for the bears is closing prices below solid support at $44.00. First resistance is seen at $47.00 and then at today’s contract high of $48.01. Next support is seen at today’s low of $45.71 and then at $45.00. Wyckoff's Market Rating: 8.0.
(Hey! My “Markets Front Burner” weekly email report is my best writing and analysis, I think, because I get to look ahead at the marketplace and do some market price forecasting. Plus, Gold prices are sharply up in early U.S. trading Monday and hit another record high. Silver prices are also up and notched another 14-year high. The powerful but mature bull market runs in gold and silver are accelerating. That’s one early clue that from a time perspective, major market tops could come sooner rather than later. However, from a price perspective, there still could be much more room on the upside for gold and silver prices during this acceleration phase of the mature bull markets, before they peter out for a while. December gold was last up $40.80 at $3,815.90. December silver prices were up $0.361 at $44.575.
I’ll throw in an educational feature to move you up the ladder of trading/investing success. And it’s free! Sign up here; it’s real easy. https://www.kitco.com/services
