Gold Steady; Bearish Outside Markets Offset Safe-Haven Demand

(Kitco News) - Gold prices ended the U.S. day session near steady levels Tuesday. Some safe-haven demand was countered by bearish “outside markets” that saw lower crude oil prices and a higher U.S. dollar index. December Comex gold was last up $0.20 an ounce at $1,325.70. December Comex silver was last down $0.03 at $18.965 an ounce.

Crude oil prices were under selling pressure Tuesday after the International Energy Agency, in its monthly report, lowered its forecast for world oil demand this year. This report follows an OPEC report on Monday that said non-OPEC oil supplies will rise in 2017. Meantime, the other key outside market saw the U.S. dollar index trading higher on the day. Precious metals are mostly priced in U.S. dollars. When the greenback appreciates against the other world currencies, it makes the metals more expensive in non-U.S. currency.

U.S. stock indexes were solidly lower Tuesday afternoon. Trading in the world stock markets has become more volatile in September, which is prompting a bit of safe-haven demand for gold. Such will continue to be the case if the historically turbulent months of September and October continue to cause problems for equity markets worldwide.

World markets continue to be focused on the major central banks and their monetary policies. The Federal Reserve’s FOMC meets next week. Federal Reserve officials are now in a quiet period ahead of the FOMC meeting.

In other news Monday, China’s National Bureau of Statistics reported Tuesday the world’s second largest economy saw industrial output rise 6.3% in August, year-on-year, versus 6.0% in July. A reading of up 6.2% was expected. China’s retail sales and fixed investment also showed good growth rates in August. This news was friendly for the precious metals market bulls.

In the Euro zone, the closely watched German ZEW current conditions index came in at 55.1 in September versus 57.6 in August. The ZEW economic expectations index came in at 0.5 in September, which is unchanged from August.

Technically, December gold futures prices closed nearer the session low. The gold bulls have the slight near-term technical advantage but have faded 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 $1,335.90 and then at $1,340.00. First support is seen at today’s low of $1,322.30 and then at $1,318.50. Wyckoff’s Market Rating: 5.5

December silver futures prices closed nearer the session low. 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 $19.35 and then at $19.50. Next support is seen at this week’s low of $18.765 and then at $18.46. Wyckoff's Market Rating: 5.5.

December N.Y. copper closed up 30 points at 210.30 cents today. Prices closed near mid-range and did hit a three-week high early on today. The copper bears have the overall near-term technical advantage. 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 today’s high of 211.85 cents and then at 214.00 cents. First support is seen at today’s low of 209.15 cents and then at this week’s low of 206.40 cents. Wyckoff's Market Rating: 3.0.

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