Gold Pressured On Some Profit Taking, Upbeat U.S. Data

(Kitco News) - Gold prices were ending the U.S. day session moderately lower Wednesday, on profit taking from the shorter-term traders, which was not unexpected. There has been a quick rebound in investor risk appetite following Tuesday’s North Korea missile incident, and that’s bearish for the safe-haven metal. A couple of upbeat U.S. economic reports and a rebound in the U.S. dollar index also added some selling pressure to the gold market and silver markets today. December Comex gold was last down $5.30 an ounce at $1,313.60. December Comex silver was last down $0.021 at $17.495 an ounce.

The ADP national employment report for August was released Wednesday morning and came in at up 237,000 jobs, which was much higher than the forecast of up 185,000. Gold prices dropped $2 or $3 on the news, which fell into the camp of the U.S. monetary policy hawks, who want to see the Federal Reserve raise interest rates again this year.

The second revision for second-quarter U.S. gross domestic product was also released Wednesday morning, and came in at up 3.0%. That was the best GDP reading in two years. That figure was also higher than the forecast rise of 2.8% and did add a bit more selling pressure to the gold market after the report’s release.

A solid rebound in the U.S. dollar index Wednesday, after hitting a 15-month low on Tuesday, also helped to put some daily selling pressure into the precious metals markets.

The major U.S. data point of the week is Friday’s employment situation report for August from the Labor Department. The key non-farm jobs number was forecast to come in at up around 180,000. However, today’s higher-than-expected ADP jobs number has many thinking Friday’s employment report will also be a surprise to the upside.

World stock markets were mostly firmer Wednesday, on corrective bounces from selling pressure seen Tuesday. As has been the case recently, North Korea’s latest provocation to the U.S. by launching a missile over Japan Tuesday has not had a lasting impact on trader and investor risk aversion. Still, this matter will likely again come to the front burner of the marketplace, and sooner rather than later. The North Korea situation has the potential to become the biggest geopolitical event since the 2001 New York terror attacks. Gold market traders know this and they will be reluctant sellers for at least the near term.

The other key outside markets on Wednesday saw Nymex crude oil futures trade near steady in early afternoon dealings. The hurricane and ensuing torrential rains that have flooded the Houston, Texas region, including major gasoline refineries, will reduce supplies of U.S. gasoline, but also reduce demand for crude oil, in the coming weeks, or longer.

Technically, December gold futures prices closed near mid-range. The gold bulls still have the solid overall near-term technical advantage. Prices are in a steep seven-week-old uptrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,350.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,290.00. First resistance is seen at today’s high of $1,319.30 and then at $1,325.00. First support is seen at today’s low of $1,310.10 and then at $1,307.00. Wyckoff's Market Rating: 7.5

December silver futures prices closed nearer the session high. The silver bulls have the overall near-term technical advantage. Prices are in a seven-week-old uptrend on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $18.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the August low of $16.56. First resistance is seen at this week’s high of $17.755 and then at the June high of $17.92. Next support is seen at Tuesday’s low of $17.345 and then at $17.25. Wyckoff's Market Rating: 6.5.

December N.Y. copper closed down 170 points at 308.80 cents today. Prices closed nearer the session low and saw mild profit taking after hitting a nearly three-year high Tuesday. The copper bulls still have the solid overall near-term technical advantage. Prices are in a four-month-old uptrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 325.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 295.00 cents. First resistance is seen at this week’s high of 312.15 cents and then at 315.00 cents. First support is seen at Tuesday’s low of 307.65 cents and then at this week’s low of 305.95 cents. Wyckoff's Market Rating: 8.0.