Gold Drops To 4-Wk Low On Technical Selling, Outside Mkts

(Kitco News) - Gold prices ended the U.S. day session solidly lower and hit a four-week low Wednesday. Modest overnight selling pressure accelerated at the U.S. Comex futures opening, when sell stop orders were triggered as prices moved below key near-term technical support levels. December Comex gold was last down $16.50 an ounce at $1,329.70. December Comex silver was last down $0.38 at $18.685 an ounce.

The “outside markets” were also bearish for the precious metals Wednesday. Nymex crude oil futures prices were lower. Crude prices are still in a near-term uptrend, however. It appears Nymex oil prices are stuck in a trading range between $40.00 and $50.00 a barrel. Meantime, the U.S. dollar index was higher but still trading not far above last week’s seven-week low.

December gold futures prices also moved below the important 50-day moving average, which emboldened some chart-based bears. However, December gold prices breached the 50-day moving average in April, May and June--only to bounce back to set a new high for the year in July. More importantly, a near-term price downtrend is developing on the daily bar chart, from the July high of $1,384.40, basis December futures.

World stock markets were narrowly mixed Wednesday. U.S. stock indexes were firmer in afternoon New York dealings.

The world marketplace is looking ahead to the Federal Reserve’s annual symposium held later this week in Jackson Hole, Wyoming. Fed Chair Janet Yellen speaks at the event on Friday morning. While it’s hoped she will shed new light on the timing of any future interest rate increase from the U.S. central bank, many think her speech will not yield much fresh insight. Still, past Jackson Hole Fed confabs have produced market-moving results.

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Technically, December gold futures prices closed nearer the session low and hit a four-week low today. The gold bulls have the overall near-term technical advantage, but are fading as a seven-week-old downtrend line is 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 last week’s high of $1,364.30. 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 $1,340.00 and then at today’s high of $1,344.10. First support is seen at today’s low of $1,328.10 and then at $1,325.00. Wyckoff’s Market Rating: 6.0

December silver futures prices closed nearer the session low and closed at a seven-week-low close today. The silver market bulls and bears are on a level overall near-term technical playing field. 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 this week’s high of $19.385. Next support is seen at this week’s low of $18.55 and then at $18.25. Wyckoff's Market Rating: 5.0.

December N.Y. copper closed down 365 points at 208.95 cents today. Prices closed nearer the session low and hit a two-month low today. The copper bears have the firm overall near-term technical advantage. Prices are in an accelerating 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 220.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the June low of 203.15 cents. First resistance is seen at today’s high of 213.05 cents and then at 215.95 cents. First support is seen at today’s low of 208.45 cents and then at 206.00 cents. Wyckoff's Market Rating: 2.5.

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