(Kitco News) - Gold ended the U.S. day session modestly lower Thursday. Selling pressure was mostly due to crude oil prices dropping to a near seven-year low and a solid rebound in the U.S. dollar index, after strong losses seen by the index Wednesday. Along with the bearish outside markets on this day, the overall bearish chart postures for both gold and silver markets are also keeping the sellers very confident. February Comex gold was last down $4.40 at $1,072.10 an ounce. March Comex silver was last down $0.069 at $14.12 an ounce.
Traders and investors in many markets are casting a wary eye toward the beleaguered raw commodity sector, led by crude oil prices today dropping to an intra-day low of $36.52 a barrel. The next downside target for Nymex crude is the 2009 low of $33.20. The marketplace reckons that with the raw commodity sector in such a bust cycle at present, the overall collective world economy cannot be in good shape, either. The bust in the raw commodity sector is prompting serious concern about price deflation gripping the world’s economies in the months ahead.
In overnight news, the Bank of England left its interest rates unchanged at its latest meeting on monetary policy. No change in policy was expected.
A World Gold Council report says Russia and China central banks continue to buy up lower-priced gold to add to their reserve stockpiles.
A Wall Street Journal story Thursday said the marketplace sees an 85% chance the U.S. Federal Reserve will raise interest rates by 0.25% at next week’s FOMC meeting. That would be the first rate increase by the Fed in around nine years. The WSJ report said the Fed needs to carefully articulate the pace at which the Fed is likely to continue to raise interest rates in the months ahead. With the high likelihood of the rate rise coming next week, the marketplace will now be fretting about the pace of future Fed rate hikes.
Technically, February gold futures prices closed near mid-range. Gold bears have the solid overall near-term technical advantage. 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 $1,080.00 and then at last week’s high of $1,088.30. First support is seen at this week’s low of $1,065.00 and then at $1,062.40. Wyckoff’s Market Rating: 2.0
March silver futures closed prices closed nearer the session low. The silver market bears have the solid overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at this week’s high of $14.64 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 Wednesday’s high of $14.335 and then at $14.50. Next support is seen at this week’s low of $14.065 and then at $14.00. Wyckoff's Market Rating: 2.0.
March N.Y. copper closed up 55 points at 207.15 cents today. Prices closed nearer the session high. The key “outside markets” were bearish for copper today as the U.S. dollar index was solidly higher and crude oil prices were lower and hit a nearly seven-year low. Copper bears have the solid 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 2100.00 cents and then at 213.45 cents. First support is seen at this week’s low of 203.35 cents and then at last week’s low of 202.55 cents. Wyckoff's Market Rating: 2.0.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff
