(Kitco News) - Gold was moderately lower in early afternoon trading Monday, on a downside correction following a solid advance last Friday that saw prices hit a two-week high and score a technically bullish weekly high close. The key “outside markets” were also in a bearish posture for the precious metals Monday, as the U.S. dollar index was higher and crude oil prices were sharply lower and near a seven-year low. February Comex gold was last down $8.00 at $1,076.20 an ounce. March Comex silver was last down $0.188 at $14.34 an ounce.
The raw commodity sector continues to suffer as its leader, crude oil, saw Nymex futures trade below $38.00 a barrel Monday. The next downside target is the $33.20 level, which is the 2009 low. Until crude oil stops its slide in prices it will be difficult for most other raw commodity markets to get sustainable upside traction.
The U.S. dollar index has regained about half of its big losses suffered last Thursday, while the Euro currency has given back not quite half of its gains seen in the immediate aftermath of the ECB monetary policy easing news last Thursday.
There was no major, markets-moving world economic news for traders and investors to digest Monday. Next week’s FOMC meeting is coming more into focus. The majority of market watchers believe the Federal Reserve will raise U.S. interest rates for the first time in nine years on December 16.
Technically, February gold futures prices closed nearer the session low on a corrective pullback from solid gains Friday that saw prices hit a two-week high and closed at a bullish weekly high close, which is an early clue of a beginning of a bottoming process in gold. Bears still have the firm overall near-term technical advantage. However, a six-week-old downtrend on the daily chart was negated with Friday’s upside price action. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,100.00. Bears' next near-term downside price breakout objective is pushing prices below solid longer-term technical support at last week’s contract low of 1,045.40. First resistance is seen at $1,080.50 and then at today’s high of $1,086.10. First support is seen at today’s low of $1,073.10 and then at $1,070.00. Wyckoff’s Market Rating: 2.0
March silver futures prices closed near the session low after hitting a four-week high early on today. The market saw a corrective pullback from solid gains Friday that produced a bullish weekly high close that does begin to suggest a market bottom is in place. The silver market bears still have the firm overall near-term technical advantage. However, a five-week-old downtrend on the daily bar chart was negated Friday. 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 contract low of $13.805. First resistance is seen at today’s high of $14.64 and then at $14.75. Next support is seen at $14.25 and then at $14.00. Wyckoff's Market Rating: 2.0.
March N.Y. copper closed down 300 points at 204.85 cents today. Prices closed nearer the session low. The key “outside markets” were bearish for copper today as the U.S. dollar index was higher and crude oil prices were lower. Copper bears have the firm overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 220.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 200.00 cents. First resistance is seen at 207.50 cents and then at 210.00 cents. First support is seen at today’s low of 204.40 cents and then at last week’s low of 202.55 cents. Wyckoff's Market Rating: 1.5.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff
