Gold Down, Hits 2-Week Low, Amid Soaring Stock Markets

(Kitco News) - Gold prices ended the U.S. day session lower and hit a two-week low Thursday. World stock markets that are on the rise this week have put significant downside price pressure on the safe-haven gold market. A higher U.S. dollar index on this day was also a negative outside market force working against the precious metals. February Comex gold was last down $8.20 an ounce at $1,189.60. March Comex silver was last down $0.16 at $16.82 an ounce.

The feature in the marketplace this week has been rallying world stock markets, led by U.S. stock indexes that again hit record highs Thursday. Asian and European stock indexes were also mostly higher Thursday, with some of those indexes also at or near multi-month or multi-year highs. The U.S. Dow Jones Industrial Average pushed above 20,000 for the first time ever Wednesday, which is likely to attract more attention from the general public and could invite even more near-term demand for stock shares.

Most Asian markets are closed Friday for a holiday, with China also closed most of next week for its lunar new year holiday.

The U.S. dollar index was higher Thursday on a corrective bounce after hitting a six-week low Wednesday. The recent selling pressure has produced technical clues the dollar index has put in a near-term market top.

The other key “outside market” on Thursday saw Nymex crude oil prices higher despite a bearish weekly U.S. oil inventories report on Wednesday that showed a rise in stockpiles. However, there are some early chart clues that suggest the oil market has put in a near-term top.

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Technically, February gold futures prices closed nearer the session low. The gold bears have the overall near-term technical advantage. A five-week-old uptrend on the daily bar chart has been negated this week. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,220.10. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,160.00. First resistance is seen at $1,200.00 and then at today’s high of $1,202.30. First support is seen at today’s low of $1,183.90 and then at $1,175.00. Wyckoff's Market Rating: 3.5

March silver futures prices closed near mid-range and hit a two-week low today. The silver market bears have the near-term technical advantage and are having a good week. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the January high of $17.36 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 $17.05 and then at $17.25. Next support is seen at today’s low of $16.68 and then at $16.50. Wyckoff's Market Rating: 3.0.

March N.Y. copper closed down 390 points at 267.10 cents today. Prices closed nearer the session low on profit taking after hitting a seven-week high Wednesday. 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 275.30 cents. The next downside price objective for the bears is closing prices below solid technical support at 250.00 cents. First resistance is seen at 270.00 cents and then at this week’s high of 273.20 cents. First support is seen at today’s low of 265.05 cents and then at this week’s low of 265.05 cents. Wyckoff's Market Rating: 7.0.

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