Gold Firm on India Demand, But Strong Greenback Limits Upside

(Kitco News) - Gold prices ended the U.S. day session with modest gains Thursday, lifted in part from reports of improving consumer demand from leading gold importer India ahead of its festival season. However, a higher U.S. dollar index that is trading near this week’s 8.5-month high limited buying interest across the precious metals spectrum. December Comex gold was last up $2.60 an ounce at $1,269.20. December Comex silver was last up $0.004 at $17.63 an ounce.

The metals also saw some buying support from a rebound in crude oil prices Thursday following a surprise decline in U.S. stockpiles, reported Wednesday. However, growing doubts that OPEC will be able cut is collective crude oil output, as the cartel decided upon a few weeks ago, has knocked oil prices well down from their recent highs.

The big data point for late this week will be Friday’s U.S. gross domestic product report for the third quarter, which is expected to see a rise of 2.5%, year-on-year. Many markets could become more volatile in the immediate aftermath of that report.

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Technically, December gold futures prices closed near mid-range today. The gold bears still have the overall near-term technical advantage. However, the sideways-to-higher price action the past three weeks could be “basing” that puts in a market bottom. 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 this week’s high of $1,277.50 and then at $1,280.00. First support is seen at this week’s low of $1,260.10 and then at $1,250.00. Wyckoff’s Market Rating: 4.0

December silver futures prices closed near mid-range today. The silver market bears have the overall near-term technical advantage. However, the sideways price action of the past three weeks could be “basing” that puts in a market bottom. 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 this week’s high of $17.89 and then at $18.04. Next support is seen at this week’s low of $17.465 and then at $17.315. Wyckoff's Market Rating: 3.5.

December N.Y. copper closed up 185 points at 216.40 cents today. Prices closed nearer the session high and hit a two-week high today. More short covering and bargain hunting were featured. The copper bears still have the slight 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 October low of 208.45 cents. First resistance is seen at today’s high of 216.70 cents and then at 218.00 cents. First support is seen at 215.00 cents and then at today’s low of 213.05 cents. Wyckoff's Market Rating: 4.5.

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