Gold Prices Rally As U.S. Dollar Index Slumps

(Kitco News) - Gold prices ended the U.S. day session with good gains Wednesday. The precious metals markets got buying support come from outside markets that were in a bullish daily posture—a solidly lower U.S. dollar index and higher crude oil prices. December Comex gold was last up $3.00 an ounce at $1,284.80. December Comex silver was last up $0.02 at $16.98 an ounce.

This afternoon’s release of the minutes from the last Federal Open Market Committee (FOMC) meeting showed members somewhat concerned about continuing low inflationary price pressures. The markets moved very little on the FOMC minutes release, which contained no surprises.

The U.S. dollar index has been trending lower for the past two weeks and is poised to drop to a four-week low if prices drop just a bit more this week. There has been a strong inverse relationship between gold and the U.S. dollar index in recent weeks—stronger than it has been in a long time. Some of this strong inverse relationship is due to the fact there has not been any major, fresh fundamental news developments to cause the gold market to see a price trend.

Meantime, Nymex crude oil futures prices were solidly higher and were poised to close at a two-year high close, basis January futures, as of this writing. Oil bulls have the firm overall near-term technical advantage. However, stiff chart resistance layers lie just above the market. Traders are looking ahead to next week’s OPEC meeting.

U.S. markets are closed for the Thanksgiving holiday on Thursday. The Friday after Thanksgiving is typically one of the lightest-volume trading days of the year for many markets.

Technically, December gold futures prices closed near the session high today. The bulls have regained the slight overall near-term technical advantage. 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 the October low of $1,262.80. First resistance is seen at today’s high of $1,292.50 and then at the October high of $1,297.50. First support is seen at $1,280.00 and then at this week’s low of $1,274.10. Wyckoff's Market Rating: 5.5

December silver futures prices closed near the session high today. The silver bulls and bears are on a level overall near-term technical playing field. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.50 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 $17.25 and then at the November high of $17.385. Next support is seen at this week’s low of $16.82 and then at $16.60. Wyckoff's Market Rating: 5.0.

December N.Y. copper closed up 75 points at 313.60 cents today. Prices closed nearer the session high today. The copper bulls have the 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 317.85 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 315.00 cents and then at 317.85 cents. First support is seen at 310.00 cents and then at Tuesday’s low of 307.95 cents. Wyckoff's Market Rating: 6.5.