Gold Ends Weaker In Choppy Action; Outside Markets Bearish

(Kitco News) - Gold prices ended the U.S. day session modestly lower in two-sided trading Monday. The key “outside markets” turned into in a bearish posture for the precious metals markets as the trading session progressed. The U.S. dollar index moved higher and hit a seven-month high. Meantime, Nymex crude oil prices were lower on reports that said Iraq said it wants to be excluded from any OPEC oil-production-cut deal. December Comex gold was last down $4.30 an ounce at $1,263.40. December Comex silver was last up $0.092 at $17.585 an ounce.

An upbeat U.S. manufacturing report Monday fell into the camp of the U.S. monetary policy hawks, who would like to see a rate hike sooner rather than later. The October Markit purchasing managers index (PMI) rose to 53.2 versus 51.5 in September. The data also favored the precious metals market bears.

Federal Reserve Bank of Chicago President Charles Evans spoke Monday at a luncheon in Chicago. He said he would support an interest rate increase in November, but also said the timing of a rise is not critical and that there is no urgency to raise U.S. interest rates. Meantime Federal Reserve Bank of St. Louis President James Bullard on Monday said the Fed should raise interest rates one more time, but added world interest rates will remain extremely low for the next two to three years.

In overnight news, the Euro zone Markit purchasing managers index (PMI) rose to 53.7 in October from 52.6 in September. The October reading was a 10-month high. A number above 50.0 suggests expansion in the sector.

(Note: Follow me on Twitter--@jimwyckoff--for breaking market news.)

Technically, December gold futures prices closed nearer the session low.  The gold bears 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 $1,270.00 and then at last week’s high of $1,275.90. First support is seen at today’s low of $1,260.10 and then at $1,255.90. Wyckoff’s Market Rating: 4.0

December silver futures prices closed nearer the session low 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 today’s high of $17.89 and then at $18.04. Next support is seen at today’s low of $17.465 and then at $17.315. Wyckoff's Market Rating: 3.5.

December N.Y. copper closed up 50 points at 209.40 cents today. Prices closed near mid-range 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 today’s high of 210.35 cents and then at last week’s high of 212.30 cents. First support is seen at last week’s low of 208.45 cents and then at 206.40 cents. Wyckoff's Market Rating: 3.0.

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