Gold Down Following Mixed Bag Of U.S. Economic Data

(Kitco News) - Gold prices ended the U.S. day session moderately lower Thursday. After trading near steady overnight, the precious metal came under selling pressure following a batch of U.S. economic data released Thursday morning. December gold was last down $7.70 an ounce at $1,318.50. December silver was last down $0.011 at $19.055.

While the U.S. economic data Thursday was a mixed bag of better strength and unexpected weakness, the marketplace appeared to focus more on the Philadelphia Fed business survey that showed a sharp improvement in September from August. The general business index that covers the factory sector showed a rise to 12.8 in September from 2.0 in August. The reading was -2.9 in July. The marketplace expected a reading of 0.0. This report falls into the camp of U.S. monetary policy hawks, who want to see an interest rate rise sooner rather than later.

In other news Thursday, the Bank of England is held its regular meeting on monetary policy and made no change in interest rates, as expected. The BOE last month announced new monetary policy stimulus measures.

The world marketplace is looking forward to 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. The Bank of Japan also meets to discuss its monetary policy next week.

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Technically, December gold futures prices closed nearer the session low today and scored a mildly bearish “outside day” down on the daily bar chart today. 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 $1,325.00 and then at today’s high of $1,332.50. First support is seen at today’s low of $1,312.10 and then at $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 55 points at 216.05 cents today. Prices closed nearer the session high and hit another three-week high today. The copper bears still have the slight overall near-term technical advantage, but the bulls have gained upside momentum 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 216.35 cents and then at 218.00 cents. First support is seen at today’s low of 214.50 cents and then at 212.00 cents. Wyckoff's Market Rating: 4.5.

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