Gold Firmer, But Off Daily High, As Greenback Sliding

(Kitco News) - Gold prices ended the U.S. day session modestly higher and well down from the daily high Wednesday. A sharp downturn in the U.S. dollar index at mid-week has helped to boost the precious metals markets. December Comex gold was last up $4.20 an ounce at $1,351.00. September Comex silver was last up $0.365 at $20.215 an ounce.

The key “outside markets” Wednesday morning saw the U.S. dollar index trading solidly lower and Nymex crude oil prices also weaker. The greenback is on a steep downslide following a weak U.S. productivity report on Tuesday, while oil prices are under pressure amid a world oil supply glut.

World stock markets were steady to narrowly mixed Wednesday. U.S. stock indexes were lower in afternoon trading in New York. Recent gains in the world stock markets that have some equities indexes at or near record or multi-year highs have taken away some investor and trader demand for the precious metals.

In a sign that there is still keen uncertainty and deflationary worries in the world marketplace, German 10-year government bond (bund) yields fell into record-low negative territory Wednesday, fetching an average yield of -0.9%, amid good demand. U.K. 10-year bonds this week also hit a record low yield of 0.53%. Chinese government 10-year bonds also hit a record low Wednesday, yielding 2.7%.

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Technically, December gold futures prices closed nearer the session low. The gold bulls have the firm overall near-term technical advantage. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the July high of $1,384.80. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the July low of $1,318.50. First resistance is seen at today’s high of $1,363.60 and then at $1,374.20. First support is seen at today’s low of $1,345.70 and then at this week’s low of $1,335.30. Wyckoff’s Market Rating: 6.5

September silver future prices closed near mid-range. The silver market bulls have the firm overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the July high of $21.225 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $19.00. First resistance is seen at today’s high of $20.515 and then at the August high of $20.835. Next support is seen at today’s low of $19.90 and then at this week’s low of $19.515. Wyckoff's Market Rating: 7.0.

September N.Y. copper closed up 240 points at 217.40 cents today. Prices closed near mid-range on short covering after hitting a four-week low on Tuesday. The copper bears still have the overall near-term technical advantage. Prices are in a three-week-old downtrend on the daily bar chart. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the July high of 227.75 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the July low of 211.65 cents. First resistance is seen at today’s high of 220.50 cents and then at 222.50 cents. First support is seen at this week’s low of 214.00 cents and then at 211.65 cents. Wyckoff's Market Rating: 4.0.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com