Gold, Silver Weighed Down By Bearish “Outside Markets”

(Kitco News) - Gold prices ended the U.S. day session weaker but up from the daily low that marked a two-week low Monday. Silver prices finished sharply lower and hit a seven-week low. The key “outside markets” were in a bearish daily posture for the precious metals to start the trading week, as the U.S. dollar index was slightly higher and crude oil prices were lower. December Comex gold was last down $2.90 an ounce at $1,343.30. September Comex silver was last down $0.432 at $18.88 an ounce.

Nymex crude oil futures prices were down today on profit taking and a corrective pullback after hitting a six-week high last Friday. The oil bulls still have the near-term chart advantage amid a price uptrend. Meantime, the U.S. dollar index was a bit firmer on a corrective bounce after hitting a seven-week low last Thursday. Some dollar-bullish “Fed speak” just recently has helped to support the greenback.

World stock markets were mixed Monday in quiet, late-summer trading. The “dog days” of summer are here. Many traders in the Western Hemisphere are on vacation. Markets could be quieter until after the U.S. Labor Day holiday in early September.

The highlight of this week will be the Federal Reserve’s annual symposium held in Jackson Hole, Wyoming. Fed Chair Janet Yellen speaks at the event on Friday. Recent comments from Federal Reserve officials have been mixed, but the majority of their recent rhetoric has leaned toward the hawkish side of U.S. monetary policy. Fed Vice Chairman Stanely Fischer on Sunday gave a speech that was deemed hawkish. There are now increasing ideas in the marketplace that the Fed will raise interest rates yet this year. Such has put some upside pressure on the U.S. dollar index just recently.

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Technically, December gold futures prices closed near the session high. The gold bulls still have the overall near-term technical advantage, but a seven-week-old downtrend line is now in place on the daily bar chart. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the August high of $1,374.20. 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 $1,350.00 and then at $1,360.00. First support is seen at the August low of $1,335.30 and then at $1,325.00. Wyckoff’s Market Rating: 6.5

September silver futures prices closed nearer the session low and hit a seven-week low today. The silver market bulls have lost their overall near-term technical advantage. Prices are in a three-week-old downtrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $20.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $18.00. First resistance is seen at $19.00 and then at today’s high of $19.25. Next support is seen at today’s low of $18.71 and then at $18.50. Wyckoff's Market Rating: 5.0.

September N.Y. copper closed down 245 points at 214.25 cents today. Prices closed nearer the session low and hit a six-week low today. The key “outside markets” were bearish for copper today as the U.S. dollar index was slightly higher and crude oil prices were lower. The copper bears have the firm overall near-term technical advantage. Prices are in a six-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 August high of 224.75 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 217.45 cents and then at last week’s high of 218.90 cents. First support is seen at today’s low of 212.70 cents and then at 211.65 cents. Wyckoff's Market Rating: 3.0.

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