Gold Backs Off Late On News Trump To Okay US Debt-Limit Extension

(Kitco News) - Gold prices sold off in late U.S. day trade Wednesday, following news the U.S. debt limit will likely be extended. The yellow metal had seen a see-saw trading session up to the unexpected U.S. debt-limit-extension reports. Still, there are bullish technical and fundamental elements in place that will likely continue to boost the gold market for at least the near term. December Comex gold was last down $6.00 an ounce at $1,338.50. December Comex silver prices were last down $0.006 at $17.935 an ounce.

The gold market saw selling pressure right after midday news reports that President Trump said he will support a three-month extension to the U.S. debt limit. That would keep the government operating and keep hurricane-damage funds flowing. The gold market had seen some slight support recently on ideas a U.S. government shutdown in the coming weeks, due to a debt-limit impasse, would create even more anxiety in the marketplace. The U.S. stock indexes pushed to their daily highs on the Trump debt-limit-extension news.

Other world stock markets were mostly weaker Wednesday, on a bevy of concerns in the marketplace. The historically turbulent months of September and October for equities are starting out in just such a manner. A recent spate of weaker-than-expected economic data coming out of the U.S. and European Union have many thinking their central banks will back off on tightening their monetary policies any time soon. Also, Hurricane Irma is bearing down on the Caribbean and later on this week is likely to hit Florida. Irma is the strongest hurricane in recorded history. And then there’s the ongoing North Korea-U.S. crisis that appears to be getting worse. All of the above is positive for the safe-haven gold market.

The precious metals saw selling interest limited today after Dovish comments from U.S. Federal Reserve Governor Lael Brainard, who said late Tuesday the Fed should wait until annual inflation hits 2.0% before raising interest rates again. News today that Fed Vice Chairman Stanley Fischer is resigning in October, for personal reasons, had no impact on the markets.

The major economic data point of the week is Thursday’s European Central Bank monetary policy meeting, including a press conference from ECB President Mario Draghi after the meeting.

The key outside markets on Wednesday morning saw the U.S. dollar index slightly weaker and trading not far above the recent 15-month low. Meantime, Nymex crude oil futures were higher.

Technically, December gold futures prices closed nearer the session low and saw some profit taking from recent gains. Prices Tuesday hit an 11-month high. The gold bulls still have the solid overall near-term technical advantage. Prices are in a steep two-month-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 $1,378.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,307.00. First resistance is seen at $1,350.00 and then at $1,360.00. First support is seen at Tuesday’s low of $1,331.10 and then at $1,325.00. Wyckoff's Market Rating: 8.0

December silver futures prices closed near the session low on mild profit taking after hitting a four-month high on Tuesday. The silver bulls still have the firm overall near-term technical advantage. Prices are in a two-month-old uptrend 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 $17.00. First resistance is seen at Tuesday’s high of $18.09 and then at $18.25. Next support is seen at Tuesday’s low of $17.835 and then at $17.50. Wyckoff's Market Rating: 7.0.

December N.Y. copper closed up 230 points at 315.05 cents today. Prices closed nearer the session high and closed at a three-year high close today. The copper bulls 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 300.00 cents. First resistance is seen at Tuesday’s high of 317.85 cents and then at 320.00 cents. First support is seen at today’s low of 312.50 cents and then at 310.00 cents. Wyckoff's Market Rating: 8.5.