(Kitco News) - Gold prices ended the U.S. day session modestly higher Wednesday, on a short-covering bounce in the futures market and some bargain hunting in the cash, following the selling pressure seen on Monday and Tuesday. However, falling crude oil prices the past two sessions has been a bearish underlying factor for the precious metals and many other raw commodity markets. December Comex gold was last up $6.40 at $1,131.20 an ounce. December Comex silver was last up $0.019 at $14.775 an ounce.

Nymex crude oil prices sold off Wednesday despite a bullish U.S. oil stocks report. The fact crude prices fell in the wake of a bullish report is a bearish clue that more downside price pressure is coming for crude. Most of the raw commodity sector will continue to be anchored in bear markets as long as crude oil remains in its bear market slump.

China’s much-anticipated report on manufacturing was downbeat Wednesday. The Caixin manufacturing purchasing managers’ index (PMI) fell to a 6.5-year low of 47.0 in September from a final figure of 47.3 in August. A reading below 50.0 suggests contraction in the sector. Asian stock markets were weaker following the manufacturing report. China’s Shanghai stock index was down around 2%. Japan’s markets remain closed for a holiday. Australian stocks were also lower, with its main stock index hitting a two-year low.

China’s president is in the United States for a visit this week. He said Tuesday his country will move forward with economic reforms, without devaluing its currency.

Meantime, the Euro zone September composite PMI came in at 53.9 versus the consensus forecast for a reading of 54.1, and 54.3 in August. European stock markets were modestly higher Wednesday.

The U.S. flash PMI came in at 53.0 in September, which was unchanged from the August reading, which was a 22-month low. The number was also in line with market expectations.

The London P.M. gold fix today was $1,131.35 versus the previous London A.M. fixing of $1,124.60.

Technically, December gold futures prices closed nearer the session high. Gold bears still have the firm overall near-term technical advantage. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the September high of $1,147.30. Bears' next near-term downside price breakout objective is closing prices below solid technical support at the September low of $1,097.70. First resistance is seen at today’s high of $1,134.00 and then at last week’s high of $1,141.50. First support is seen at this week’s low of $1,120.50 and then at $1,114.70. Wyckoff’s Market Rating: 2.5

December silver futures prices closed near mid-range today and saw tepid short covering in a bear market. Silver bears have the solid overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the September high of $15.435 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the September low of $14.24. First resistance is seen at today’s high of $14.91 and then at $15.00. Next support is seen at today’s low of $14.685 and then at $14.50. Wyckoff's Market Rating: 2.0.

December N.Y. copper closed down 20 points at 229.55 cents today. Prices closed nearer the session low today. Copper bears have the solid overall near-term technical advantage and have gained downside momentum this week. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the September high of 249.30 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the August low of 220.25 cents. First resistance is seen at today’s high of 232.50 cents and then at 235.00 cents. First support is seen at this week’s low of 228.55 cents and then at 225.00 cents. Wyckoff's Market Rating: 1.5.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff

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