Gold, Silver Beat-Down Accelerates

(Kitco News) - The precious metals markets were already in some trouble when a surprisingly hawkish tone on U.S. monetary policy was sounded by the Federal Reserve on Wednesday afternoon. Gold and silver prices sank to three-week lows Thursday, on ideas U.S. monetary policy will significantly tighten in the coming months. The past several years of easy money from the world’s major central banks had been a bullish tonic for the metals markets. December Comex gold was last down $20.10 an ounce at $1,296.30. December Comex silver prices were last down $0.334 at $16.995 an ounce.

The Fed did not raise interest rates this week but did announce that in October it will start reducing its big balance sheet of U.S. securities. The aforementioned moves were not surprising. What was surprising is the Fed’s upbeat tone on the U.S. economy despite two major hurricanes that just hit the U.S. mainland. A December interest rate hike remains firmly on the table and the Fed also wants to raise U.S. rates three times in 2018.

The U.S. dollar index, which rallied strongly Wednesday afternoon, could not sustain its upside momentum and traded moderately lower Thursday. Still, today’s weaker greenback did little to help the precious metals markets.

The other key outside market on Thursday morning saw Nymex crude oil futures weaker this morning. The oil bulls have the overall near-term technical advantage as prices hover just above $50 a barrel.

A bullish element that could quickly rescue the gold and silver markets would be a flare-up in U.S.-North Korea tensions, which is certainly plausible. The Trump administration slapped more economic sanctions on North Korea today. This week’s harsh rhetoric coming from President Trump at his U.N. speech and the new sanctions appear to put the ball back in “rocketman’s” court.

Technically, December gold futures prices closed nearer the session low today. The gold bulls have lost their overall near-term technical advantage amid the recent steep sell off, which suggests a near-term market top is in place. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,325.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,275.00. First resistance is seen at $1,300.00 and then at $1,307.00. First support is seen at today’s low of $1,291.20 and then at $1,285.00. Wyckoff's Market Rating: 5.0

December silver futures prices closed nearer the session low and hit a three-week low today. The silver bulls have lost their overall near-term technical advantage, but suggest a market top is in place. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the September high of $18.29 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 $17.225 and then at $17.445. Next support is seen at today’s low of $16.865 and then at $16.80. Wyckoff's Market Rating: 5.0.

December N.Y. copper closed down 345 points at 293.45 cents today. Prices closed nearer the session low and hit a five-week low today. The copper bulls still have the slight overall near-term technical advantage, but have faded recently to suggest a near-term market top is in place. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the September high of 317.85 cents. The next downside price objective for the bears is closing prices below solid technical support at 280.00 cents. First resistance is seen at today’s high of 296.30 cents and then at this week’s high of 299.30 cents. First support is seen at today’s low of 292.00 cents and then at 290.00 cents. Wyckoff's Market Rating: 5.5.