Gold Ends Firmer Amid Weaker U.S. Dollar, Value Shopping

(Kitco News) - Gold prices ended the U.S. day session moderately higher Thursday, supported by some more short covering in the futures market and perceived bargain-basement buying in the cash market. A weaker U.S. dollar index and on this day was also a bullish “outside market” element working in favor of the precious metals bulls. December Comex gold was last up $3.60 an ounce at $1,257.30. December Comex silver was last down $0.04 at $17.465 an ounce.

The U.S. dollar index was pressured today by some profit taking and a corrective pullback after hitting a seven-month high overnight. Still, the recently appreciating greenback is a bearish outside market force that has worked against the raw commodity sector the past couple weeks.

Nymex crude oil prices were slightly up Thursday. A report this week that OPEC has increased its crude oil production levels has limited buying interest the past couple days. Still oil prices are trending higher and hit a three-month high this week. Crude oil’s daily price movements continue to have an influence over many other markets, and especially world stock markets.

Technically, December gold futures prices closed nearer the session low today. Short covering and bargain hunting were featured. Serious near-term technical damage has been inflicted in gold recently. A bearish pennant pattern has formed on the daily bar chart. 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 this week’s high of $1,266.80 and then at $1,271.60. First support is seen at $1,250.00 and then at last week’s low of $1,243.20. Wyckoff’s Market Rating: 3.5

December silver futures prices closed nearer the session low today. 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 $17.43 and then at this week’s high of $17.855. Next support is seen at this week’s low of $17.38 and then at last week’s low of $17.115. Wyckoff's Market Rating: 3.5.

December N.Y. copper closed down 540 points at 212.25 cents today. Prices closed nearer the session low today and hit a four-week low. The copper bears have gained the 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 the September low of 206.40 cents. First resistance is seen at 215.00 cents and then at 217.00 cents. First support is seen at today’s week’s low of $2.1165 and then at 210.00 cents. Wyckoff's Market Rating: 4.0.

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