Gold Ends Near Steady; Optimism, Strong Greenback Squelching Bulls

(Kitco News) - Gold prices ended the U.S. day session slightly higher Wednesday, seeing mild support coming from a report on U.S. producer prices that was well below market expectations. Still, an upswing in trader and investor risk appetite the past week continues to be a bearish weight on the safe-haven gold market. Deteriorated chart postures for gold and silver markets the past week have also led to technical selling pressure. December Comex gold was last up $0.40 an ounce at $1,224.90. December Comex silver was last down $0.103 at $16.94 an ounce.

The October U.S. producer price index came in an unchanged, which was below market expectations of a rise of 0.3%. The PPI excluding food and energy was down 0.2%. This report suggests there are no inflationary problems on the horizon and falls into the camp of the U.S. monetary policy doves who do not want to see interest rates rise any time soon. However, St. Louis Fed president James Bullard said in London today that he foresees a U.S. rate hike coming in December.

World stock markets were mostly higher overnight as the “risk-on” trader and investor psychology continues one week after Donald Trump won in a surprising U.S. presidential election. The marketplace reckons a Trump presidency will unleash more business spending and infrastructure rebuilding amid less taxation and less restraints. The Dow Jones Industrial Average on Tuesday closed at a new record high. U.S. stock indexes are pointed toward weaker openings when the New York day session begins.

The key outside markets on Wednesday find the U.S. dollar index trading higher and hitting a 10-month high. The stronger U.S. currency is a negative for the raw commodity sector, as most raw commodities are priced in U.S. dollars on world markets. Meantime,
Nymex crude oil prices were near steady after good gains posted Tuesday.

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

Technically, December gold futures prices closed near mid-range again today. The gold bears have the overall near-term technical advantage. A bearish pennant pattern could be forming on the daily bar chart. Prices are in a four-month-old downtrend. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,265.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,200.00. First resistance is seen at today’s high of $1,233.10 and then at $1,243.20. First support is seen at Tuesday’s low of $1,218.60 and then at this week’s low of $1,211.00. 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 are in a four-month-old downtrend on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $18.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at today’s high of $17.235 and then at this week’s high of $17.49. Next support is seen at Tuesday’s low of $16.82 and then at this week’s low of $16.62. Wyckoff's Market Rating: 4.0.

December N.Y. copper closed down 375 points at 246.70 cents today. Prices closed nearer the session low. The copper bulls still have the firm overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the November high of 273.45 cents. The next downside price objective for the bears is closing prices below solid technical support at 235.00 cents. First resistance is today’s high of 251.20 cents and then at 255.00 cents. First support is seen at this week’s low of 242.60 cents and then at 240.00 cents. Wyckoff's Market Rating: 7.0.

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