Gold Hits 2-Week High On Upbeat China Data, Bullish Chart Signal

(Kitco News) - Gold prices ended the U.S. day session moderately firmer and scored a two-week high Wednesday. Some chart-based buying was featured after prices scored an upside “breakout” from a near-term trading range on the daily chart.  Higher crude oil prices were also bullish for the precious metals today. December Comex gold was last up $7.40 an ounce at $1,270.30. December Comex silver was last up $0.017 at $17.655 an ounce.

The highlight of the marketplace Wednesday was some mostly upbeat economic data coming out of China, which was also friendly for the precious metals. China is a major importer of commodities, including metals. China’s economy grew by 6.7% in the third quarter, year-on-year, which was in line with market expectations. The figure was also the same as the second quarter. China also reported its retail sales increased by 10.7% in September, from a year earlier. That number was also in line with expectations. China’s industrial production was up 6.1% in September, year-on-year. That number was a miss to the downside. Overall, the data from the world’s second-largest economy was deemed upbeat. Indeed, other major world economies’ economic growth numbers don’t come anywhere close to China’s.

The World Gold Council said Wednesday that the recent decline in gold prices should spur more demand for physical gold from China.

Nymex crude traded above $51.00 a barrel Wednesday. One analyst says OPEC’s recent decision to curb its collective oil production is a sign that OPEC’s original strategy of all-out oil production in order to defeat U.S. shale oil production was a failure. The other key “outside market” on Wednesday saw the U.S. dollar index slightly higher in afternoon trading.

Technically, December gold futures prices closed nearer the session high and hit a two-week high today. Prices saw a bullish upside breakout from a trading range to give the bulls some momentum. However, the gold bears still have the overall near-term technical advantage. Prices are still in a 3.5-month-old downtrend on the daily bar chart. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the October low of $1,243.20. First resistance is seen at today’s high of $1,274.40 and then at $1,280.00. First support is seen at today’s low of $1,261.10 and then at $1,255.90. Wyckoff’s Market Rating: 4.0

December silver futures prices closed near mid-range today. The silver market bears still have the overall near-term technical advantage. Prices are in a 3.5-month-old downtrend on the daily bar chart. 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 last week’s high of $17.855 and then at $18.04. Next support is seen at $17.455 and then at last week’s low of $17.315. Wyckoff's Market Rating: 3.5.

December N.Y. copper closed down 25 points at 210.30 cents today. Prices closed nearer the session high today after hitting a five-week low 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 September low of 206.40 cents. First resistance is seen at this week’s high of 212.30 cents and then at 214.00 cents. First support is seen at today’s low of 208.75 cents and then at 206.40 cents. Wyckoff's Market Rating: 3.0.

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