Gold, Silver See Short-Covering, Bargain-Hunting Bounces

(Kitco News) - Gold and silver futures prices ended the U.S. day session moderately higher Monday, on short covering in the futures market and bargain hunting in the cash, following last week’s drubbing that drove both markets to multi-month lows. December Comex gold was last up $9.50 an ounce at $1,261.40. December Comex silver was last up $0.325 at $17.705 an ounce.

Gold prices also benefited Monday on ideas U.S. presidential candidate Donald Trump performed better than expected at the Sunday evening debate against Hillary Clinton. Most of the world marketplace sees Trump as a bigger unknown than Clinton.

China market participants are returning to the marketplace this week after a week-long holiday last week. Chinese and Indian demand for gold bullion may pick up in the coming weeks, ahead of Indian festivals and on notions last week’s price downturn presents a longer-term value-buying opportunity in gold.

Crude oil prices are higher Monday and hovering just above $51.00. The recent rally in oil prices is a bullish underlying factor for the precious metals and for all raw commodity markets. Reports Monday said Russia’s energy minister will soon discuss OPEC’s proposal to reduce crude oil production levels. The Saudi Arabian oil minister says he is optimistic an OPEC accord can be reached and that crude oil prices could hit $60.00 a barrel yet this year.

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Technically, December gold futures prices closed nearer the session low today. Serious near-term technical damage has been inflicted with the recent downdraft, to suggest sideways-to-lower price action for at least the near term. The gold bears have the overall near-term technical advantage. Prices have been trending lower for three months. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,280.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,230.00. First resistance is seen at today’s high of $1,266.80 and then at $1,271.60. First support is seen at today’s low of $1,258.50 and then at $1,250.00. Wyckoff’s Market Rating: 4.0

December silver futures prices closed near mid-range today. Short covering and bargain hunting were featured. The silver market bears have the overall near-term technical advantage. Prices have been trending lower for three months. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $18.46 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.00. First resistance is seen at today’s high of $17.84 and then at $18.04. Next support is seen at $17.50 and then at $17.25. Wyckoff's Market Rating: 4.0.

December N.Y. copper closed up 310 points at 219.45 cents today. Prices closed nearer the session high today. The copper bulls have the slight overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the September high of 221.90 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 210.00 cents. First resistance is seen at today’s high of 220.25 cents and then at 221.90 cents. First support is seen at today’s low of $2.1645 and then at last week’s low of 214.55 cents. Wyckoff's Market Rating: 5.5.

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