Several Bearish Daily Elements Combine to Sink Gold, Silver

(Kitco News) - Gold and silver prices were closing the U.S. day session with solid losses Tuesday. A combination of factors worked to drive the metals down today. A good rebound in the U.S. dollar index today was a bearish outside-market factor. Profit taking by the shorter-term futures traders was also featured. Pre-placed sell stop orders in the gold and silver futures markets were also triggered today when near-term chart support levels were breached. And weak-handed long positions in the futures markets were also squeezed out of the markets to drive gold and silver prices still lower. December gold was last down $16.50 an ounce at $1,286.60. December silver was down $0.339 at $17.03 an ounce. 

Reports that U.S. President Donald Trump met with economist John Taylor, and was very impressed by him, did add some selling pressure to the raw commodity markets today, including the precious metals. Taylor is widely perceived to be a hawk on U.S. monetary policy.

Some upbeat U.S. economic data released Tuesday morning also fell into the camp of the U.S. monetary policy hawks, which was also a bit bearish for the precious metals markets. Industrial production and capacity utilization numbers came in about as expected, but did not show any significant downturn from two major hurricanes that hit the U.S. mainland a few weeks ago.

The geopolitical scene has been quieter the past couple weeks and that’s allowed world trader/investor risk appetite to uptick, which is also bearish for safe-haven gold, and to a lesser degree silver. U.S. stock indexes this week have hit record highs, with the closely watched Dow Jones Industrial Average pushing above 23,000 for the first time.

China on Wednesday starts its twice-a-decade Party Congress meetings, in which major economic and cultural planning initiatives are laid out for the next five years. Traders and investors will keep a close watch for any pronouncements coming out of those meetings.

Technically, December gold futures prices closed nearer the session low. Bulls still have the slight overall near-term technical advantage, but need to show fresh power soon to keep it. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,320.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,270.00. First resistance is seen at $1,290.00 and then at $1,300.00. First support is seen at today’s low of $1,283.20 and then at $1,275.00. Wyckoff's Market Rating: 5.5

December silver futures prices closed nearer the session low. The silver bulls still have the slight overall near-term technical advantage, but need to show fresh power soon to keep it. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.75 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the October low of $16.345. First resistance is seen at today’s high of $17.28 and then at $17.50. Next support is seen at $17.00 and then at $16.765. Wyckoff's Market Rating: 5.5.

December N.Y. copper closed down 430 points at 319.60 cents today. Prices closed nearer the session low and saw profit taking after hitting a 3.5-year high on Monday. The copper bulls still have the solid overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the September high of 330.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 310.00 cents. First resistance is seen at this week’s high of 325.95 cents and then at 327.50 cents. First support is seen at 315.00 cents and then at this week’s low of 311.20 cents. Wyckoff's Market Rating: 8.0.