Gold Prices Slump To 4-Mo. Low As Chart-Based Sellers Emboldened

(Kitco News) - Gold and silver prices ended the U.S. day session solidly lower Tuesday. Gold prices hit a four-month low, while silver prices dropped to a nearly five-month low. Keener risk appetite in the world marketplace recently is keeping the precious metals buyers timid. Also, the near-term charts for gold and silver have turned significantly more bearish this week. February Comex gold was last down $11.50 an ounce at $1,266.20. March Comex silver was last down $0.303 at $16.07 an ounce.

The chart-based sellers were in the spotlight today, as gold prices dropped below their key 200-day moving average that many traders watch closely. Gold also dropped below the October and November lows, which triggered pre-placed sell stop orders in the futures market. The gold and silver market bears now have technical momentum on their side, which suggests still some more price pressure is coming in the near term.

Trader and investor money flows recently have favored equities markets worldwide, with many stock indexes at or near record or multi-year highs. This is bearish for the safe-haven metals. One thing that is a certainty: The very mature bull market runs in world equities will end at some point, and when they do, money flows out of stocks will benefit hard assets like the precious metals.

The key “outside markets” Tuesday saw the U.S. dollar index higher, which was also a negative for the metals. Nymex crude oilfutures prices were modestly higher today.  

The economic report highlight of the trading week will be Friday morning’s November U.S. employment report from the Labor Department. The key non-farm payrolls number is forecast to be up 195,000.

Technically, February gold futures prices closed nearer the session low today. The bears have gained the overall near-term technical advantage, to suggest some more downside price pressure in the near term. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the November high of $1,303.40. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,250.00. First resistance is seen at $1,275.00 and then at $1,280.00. First support is seen at today’s low of $1,263.20 and then at $1,260.00. Wyckoff's Market Rating: 4.0

March silver futures prices closed nearer the session low and hit a nearly five-month low today. The silver bears have the firm overall near-term technical advantage and gained more power today. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $16.75 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the July low of $15.225. First resistance is seen at today’s high of $16.38 and then at $16.50. Next support is seen at $16.00 and then at $15.75. Wyckoff's Market Rating: 2.5.

March N.Y. copper closed down 1,420 points at 294.65 cents today. Prices closed near the session low and hit a nine-week low today. The copper bulls have lost their overall near-term technical advantage and it appears that a market top is in place. Prices are in a six-week-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 310.00 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 300.00 cents and then at 305.00 cents. First support is seen at today’s low of 294.30 cents and then at the September low of 291.35 cents. Wyckoff's Market Rating: 5.0.