Risk-On Attitudes, Strong U.S. Dollar Stymie Gold Bulls

(Kitco News) - Gold Prices were ending the U.S. day session slightly lower Thursday. Some early-session short covering and bargain hunting gave way to selling pressure tied to risk-on attitudes and a rallying U.S. dollar index. December Comex gold was last down $2.10 an ounce at $1,274.60. December Comex silver prices were last up $0.046 at $16.67 an ounce.

U.S. stock indexes hit record highs Thursday, to underscore the lack of risk aversion in the marketplace at this time.

The U.S. dollar index was solidly higher in early-afternoon U.S. trading. The greenback bulls have been working the dollar index sideways to higher for the past few weeks. A stronger dollar on the foreign exchange market makes precious metals priced in U.S. dollars more expensive to purchase in non-U.S. currency.

Also a bearish underlying element for the precious metals markets is recent more hawkish rhetoric coming from the major central banks of the world—namely the Federal Reserve and European Central Bank. Odds are high and getting higher that the U.S. Federal Reserve will raise interest rates in December. Metals and other raw commodity markets had been supported in recent years by easy-money policies from the world’s central bankers.

Traders and investors are looking ahead to Friday’s U.S. employment report for September from the Labor Department. The key non-farm payrolls number is expected to come in at up only 80,000, according to a Dow Jones Newswires survey. The unusually low non-farm jobs growth estimate is due to two major hurricanes that hit the U.S. mainland in September.

The other key outside market on Thursday saw Nymex crude oil futures prices higher in afternoon dealings. Still, oil gains have been capped this week by notions of rising U.S. crude oil production that is approaching 10 million barrels a day.

Technically, December gold futures prices closed near the session low. Bears have the overall near-term technical advantage. A four-week-old downtrend is in place on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,250.00. First resistance is seen at today’s high of $1,281.60 and then at this week’s high of $1,285.00. First support is seen at this week’s low of $1,271.00 and then at $1,265.00. Wyckoff's Market Rating: 4.0

December silver futures prices closed near mid-range today. The silver bears have the overall near-term technical advantage. Prices are in a four-week-old downtrend on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $17.295 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 this week’s high of $16.92 and then at $17.00. Next support is seen at $16.50 and then at $16.25. Wyckoff's Market Rating: 4.0.

December N.Y. copper closed up 845 points at 304.35 cents today. Prices closed near the session high and hit a three-week high today. The copper bulls have the firm overall near-term technical advantage and gained fresh power today. 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 290.00 cents. First resistance is seen at today’s high of 307.00 cents and then at 307.50 cents. First support is seen at 300.00 cents and then at 297.50 cents. Wyckoff's Market Rating: 7.0.