Gold Weaker As U.S. Dollar Index Powers Higher

(Kitco News) – Gold prices are again modestly down in early U.S. trading Tuesday. A stronger U.S. dollar index that scored a new for-the-move high overnight is weighing on the precious metals markets today. Higher U.S. stock indexes to start the trading day are also a negative for the safe-haven gold and silver markets. December gold futures were last down $3.40 an ounce at $1,224.20. December Comex silver was last down $0.007 at $14.435 an ounce.

Global stock markets were mixed to mostly lower overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins, on an upside correction following Monday’s sell off that pushed the indexes to six-month lows. There is still strong near-term technical evidence the U.S. stock indexes have put in market tops.

Significant selling pressure in the U.S. stock market today would likely prompt some safe-haven demand for gold.

Reports Monday afternoon said the Trump administration will impose tariffs on all Chinese goods imported into the U.S., if the meeting between Presidents Trump and Xi Jinpin in Argentina in late November do not produce results. This news helped sink the U.S. stock market Monday afternoon.

In overnight news, the Euro zone reported its latest quarterly gross domestic product rose only a paltry 0.6% in the third quarter, year-on-year. That compares to the latest U.S. GDP third-quarter growth rate of 3.5%.

The other key outside market today finds November Nymex crude oil prices lower and trading around $66.50 a barrel. The slumping crude oil market is an underlying bearish element for the raw commodity sector, including the precious metals. Crude oil is arguably the leader of the raw commodity sector.

The key U.S. economic data point of the week, if not the month, will be Friday’s November employment report from the Labor Department.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the S&P/Case-Shiller home price indexes, and the consumer confidence index.

Technically, gold bulls have the slight near-term technical advantage but they are fading this week. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $1,250.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,200.00. First resistance is seen at the overnight high of $1,232.50 and then at Monday’s high of $1,237.60. First support is seen at the overnight low of $1,221.40 and then at $1,220.00. Wyckoff’s Market Rating: 5.5

December silver futures bears have the firm overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $15.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the September low of $13.965. First resistance is seen at Monday’s high of $14.78 and then at the October high of $14.95. Next support is seen at the October low of $14.255 and then at $14.00. Wyckoff’s Market Rating: 3.0.

By Jim Wyckoff
For Kitco News


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