Gold Price Weaker as US Dollar Index Sees Strong Bounce
New York (Dec 10) Gold is modestly lower in early US trading Thursday and is seeing selling pressure in part due to a solid rebound in the U.S. dollar index after the strong losses posted Wednesday. The overall bearish chart postures for both gold and silver markets are also keeping the sellers confident. February Comex gold was last down $3.50 at $1,073.00 an ounce. March Comex silver was last down $0.024 at $14.165 an ounce.
World stock markets traded in narrow ranges Thursday, but with a nervous tone as traders and investors cast a wary eye toward the slumping raw commodity sector, led by crude oil prices this week hitting a nearly seven-year low. The marketplace reckons that with the raw commodity sector in such a bust cycle at present, the overall collective world economy cannot be in good shape. The bust in the raw commodity sector is prompting serious concern about price deflation gripping the world’s economies in the months ahead.
In overnight news, the Bank of England left its interest rates unchanged at its latest meeting on monetary policy. No change in policy was expected.
A World Gold Council report says Russia and China central banks continue to buy up lower-priced gold to add to their reserve stockpiles.
A Wall Street Journal story Thursday said the marketplace sees an 85% chance the U.S. Federal Reserve will raise interest rates by 0.25% at next week’s FOMC meeting. That would be the first rate increase by the Fed in around nine years. The WSJ report said the Fed needs to carefully articulate the pace at which the Fed is likely to continue to raise interest rates in the months ahead. With the high likelihood of the rate rise coming next week, the marketplace will now be fretting about the pace of future Fed rate hikes.
U.S. economic data due for release Thursday includes the weekly jobless claims report, import and export price indexes and the monthly Treasury budget statement.
Wyckoff’s Daily Risk Rating: 2.5 (Trader and investor market risk aversion is not elevated today.)
(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 5, with 1 being least risk-averse (most risk-on) and 5 being the most risk-averse (risk-off).
Technically, gold bears have the firm overall near-term technical advantage. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,100.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at last week’s low of $1,045.40. First resistance is seen at $1,080.00 and then at last week’s high of $1,088.30. First support is seen at this week’s low of $1,065.00 and then at $1,062.40. Wyckoff’s Market Rating: 2.0
Silver bears have the firm overall near-term technical advantage. Bulls’ next upside price breakout objective is closing December futures prices above solid technical resistance at $15.00 an ounce.
Source: KitcoNews
