old, Silver Prices Sell Off On Hawkish Yellen, Rebounding Greenback

(Kitco News) - Gold prices were ending the U.S. day session lower Tuesday, pressured by a more hawkish tone on U.S. monetary policy and a solid rebound in U.S. dollar index early this week. Silver prices were also hit hard today and fell to a four-week low. The silver market continues to closely follow big-brother gold. December Comex gold was last down $9.90 an ounce at $1,301.60.December Comex silver prices were last down $0.242 at $16.905 an ounce.

Remarks by Fed Chair Janet Yellen that were deemed by many to be more hawkish on U.S. monetary policy pushed the precious metals to their daily lows around midday. Yellen said in a speech to the National Association of Business Economists in Ohio that the Fed may have misjudged the strength of the U.S. labor market and it may become overheated, which could lead to higher U.S. inflation. Yellen also said the Fed should beware about tightening monetary policy too gradually. However, some deemed Yellen’s overall remarks as neutral because she did throw in some comments that could be construed as dovish on U.S. monetary policy.

Still, the U.S. dollar index hit its daily high in the aftermath of Yellen’s remarks. The index also pushed to a four-week high, to begin to suggest the greenback has put in a near-term market low. The dollar index had backed down a bit from its daily high as of this writing early Tuesday afternoon.

World stock markets were mostly weaker overnight, as some risk aversion is back in the marketplace following Monday’s latest salvo from North Korea, in which the isolated nation said the U.S. had declared war on it. North Korea also said it had the right to shoot down U.S. warplanes outside of its air space. However, traders and investors are getting somewhat desensitized to the war of words between the U.S. and North Korea.

Still, safe-haven demand and bargain hunters willing to buy any dips will likely continue to at least limit the downside in the gold market for at least the next few weeks. It would not be surprising to see bargain buyers step in Wednesday, following Tuesday’s dip in gold.

The other key outside market on Tuesday saw Nymex crude oil futures slightly lower in afternoon trading, after hitting a four-month high overnight. The oil bulls have the near-term technical advantage and have momentum. That’s an underlying bullish element for the raw commodity sector, including the precious metals.

Technically, December gold futures prices closed nearer the session low and took back most of Monday’s gains. The gold bulls and bears are back on a level overall near-term technical playing field. 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 $1,280.00. First resistance is seen at $1,310.00 and then at today’s high of $1,317.10. First support is seen at today’s low of $1,296.60 and then at last week’s low of $1,291.20. Wyckoff's Market Rating: 5.0

December silver futures prices closed nearer the session low and scored a bearish “outside day” down on the daily bar chart. Prices also hit a four-week low today. The silver bulls and bears are back on a level overall near-term technical playing field. 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 $17.00 and then at today’s high of $17.295. Next support is seen at today’s low of $16.815 and then at $16.50. Wyckoff's Market Rating: 5.0.

December N.Y. copper closed down 165 points at 292.10 cents today. Prices closed nearer the session 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 296.65 cents and then at last week’s high of 299.30 cents. First support is seen at today’s low of 290.75 cents and then at last week’s low of 289.40 cents. Wyckoff's Market Rating: 5.5.