Recent Hawkish Central Banker Language Pressures Gold, Silver

(Kitco News) - Gold prices ended the U.S. day session moderately lower Monday, as the marketplace is increasing the odds that a U.S. interest rate hike from the Federal Reserve could come yet this year—and as early as next week. December Comex gold was last down $7.00 an ounce at $1,327.60. December Comex silver was last down $0.363 at $19.005 an ounce.

The world marketplace is once again seemingly consumed by “Fed speak” and comments from other world central bank officials. Comments from Federal Reserve Governor Lael Brainard on Monday afternoon favored the dovish camp on U.S. monetary policy. Markets gyrated a bit after her comments, but then settled down quickly to trade at price levels close to where they were before her comments hit the news wires.

Last Friday another U.S. Federal Reserve official hinted U.S. interest rates still could be raised this year despite recent weaker U.S. economic data. Last week the European Central Bank also failed to initiate new monetary policy stimulus for the Euro zone, which disappointed many European market watchers. And a People’s Bank of China official on Monday sounded hawkish on China monetary policy in his remarks in an interview.

The Federal Open Market Committee (FOMC) meets next week to decide on any changes in U.S. monetary policy.

Many world commodity markets also saw some selling pressure Monday. However, those losses were mitigated when Nymex crude oil prices posted a midday rebound. The specter of tighter monetary policies from the world’s major central banks is also a bearish element for the raw commodity sector.

World markets are also watching the health of U.S. presidential candidate Hillary Clinton, who has been diagnosed with pneumonia.

The month of September has so far seen some rough waters for world stock markets. 
This keener uncertainty and risk aversion in the market place seen just recently is a bullish underlying factor for the safe-haven gold market. If trader and investor anxiety increases in the near term, such would likely support a rally in the gold market.

There was no major U.S. economic data due for release Monday.

Technically, December gold futures prices closed nearer the session low. The gold bulls still have the slight near-term technical advantage but are fading and need to show fresh power soon to keep it. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the September high of $1,357.60. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the September low of $1,305.50. First resistance is seen at today’s high of $1,333.80 and then at $1,340.00. First support is seen at today’s low of $1,323.30 and then at $1,318.50. Wyckoff’s Market Rating: 5.5

December silver futures prices closed near mid-range today. The silver market bulls still have the slight overall near-term technical advantage, but need to show fresh power soon to keep it. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the September high of $20.235 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the August low of $18.46. First resistance is seen at today’s high of $19.22 and then at $19.50. Next support is seen at today’s low of $18.765 and then at $18.46. Wyckoff's Market Rating: 5.5.

December N.Y. copper closed up 70 points at 209.95 cents today. Prices closed nearer the session high on short covering after hitting a three-month low early on today. The copper bears have the overall near-term technical advantage. Prices are in a two-month-old downtrend on the daily bar chart. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 218.00 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 last week’s high of 211.20 cents and then at 213.00 cents. First support is seen at 208.00 cents and then at today’s low of 206.40 cents. Wyckoff's Market Rating: 3.0.

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