Gold Firmer On Short-Covering, Bargain Hunting As FOMC Meeting Looms

(Kitco News) - Gold prices ended the U.S. day session firmer in quieter trading Wednesday. More mild short-covering and bargain-hunting was featured following recent declines. December Comex gold was last up $2.20 an ounce at $1,325.90. December Comex silver was last up $0.075 at $19.05 an ounce.

The world marketplace is looking forward to the next big data point: next week’s meeting of the Federal Reserve’s Open Market Committee (FOMC). Trading may be more subdued ahead of the meeting, which begins next Tuesday and ends next Wednesday afternoon. The markets are putting just slight odds on the prospect of the Fed raising rates at that meeting. The more likely date of a U.S. rate hike would be in December, according to traders and investors.

World stock markets stabilized Wednesday following selling pressure seen earlier this week. The recent decline in crude oil prices has helped to weigh on world stock markets. Asian stocks did see modest selling pressure, following the lead of lower closes in the U.S. stock indexes Tuesday. A rise in the Chinese yuan overnight borrowing cost, to above 8%, did cause some anxiety among Asian traders.

Crude oil prices were lower again Wednesday, on follow-through pressure from solid losses Tuesday after the International Energy Agency, in its monthly report, lowered its forecast for world oil demand this year. The other key “outside market” saw the U.S. dollar index trading lower Wednesday.

Technically, December gold futures prices closed nearer the session high. The gold bulls have the slight near-term technical advantage but have faded recently 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 this week’s high of $1,335.90 and then at $1,340.00. First support is seen at today’s low of $1,316.60 and then at the September low of $1,305.50. Wyckoff’s Market Rating: 5.5

December silver futures prices closed near mid-range. The silver market bulls have the slight overall near-term technical advantage, but need to show more 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 this week’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 490 points at 215.05 cents today. Prices closed nearer the session high and hit a three-week high today. The copper bears still have the slight overall near-term technical advantage, but the bulls gained upside momentum today, to suggest a market bottom is in place. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 225.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at this week’s low of 206.40 cents. First resistance is seen at today’s high of 216.15 cents and then at 218.00 cents. First support is seen at 214.00 cents and then at 212.00 cents. Wyckoff's Market Rating: 4.5.

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