Gold Ends Lower on Bearish "Outside Market" Forces
New York (Dec 15) Gold prices ended the U.S. day session solidly lower Monday, pressured by lower crude oil prices and a higher U.S. dollar index on this day. Gold and silver bulls had gained some upside technical momentum last week, but they are now fading again and need to show fresh power soon to suggest recent lows can be held. February Comex gold was last down $14.90 at $1,207.70 an ounce. Spot gold was last down $14.40 at $1,207.75. March Comex silver last traded down $0.527 at $16.53 an ounce.
The plunging price of crude oil the past few weeks has spooked the stock and many commodity markets, despite the benefit for consumers at the gasoline pumps. January Nymex crude oil on Monday dropped to another five-year low of $55.87 a barrel.
The U.S. dollar index was firmer Monday and hovering not far below its recent four-year high. The stronger greenback the past few months has been a bearish underlying factor for the raw commodity sector. Most raw commodities, including precious metals, are priced in U.S. dollars on the world markets. When the greenback appreciates in value against the other currencies, it makes those commodities more expensive to purchase. Read that less demand.
In overnight news, Japanese Prime Minister Shinzo Abe saw an election victory on Sunday, which was not unexpected. After his victory, Abe said he would continue on his path to boost the presently moribund Japanese economy.
Traders and investors are looking ahead to this week’s Federal Reserve Open Market Committee (FOMC) meeting to discuss U.S. monetary policy. Many believe the Fed meeting will slightly change statement wording to favor the monetary policy hawks. The FOMC could also further elaborate on a timeline for raising interest rates. The Fed has not raised interest rates in six years.
The London P.M. gold fix was $1,209.25 versus the previous London A.M. fixing of $1,210.75.
Technically, February gold futures prices closed nearer the session low. The gold bulls are fading on the charts again. Their next upside near-term price breakout objective is to produce a close above solid technical resistance at the December high of $1,239.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at the October low of $1,184.80. First resistance is seen at $1,221.00 and then at today’s high of $1,225.00. First support is seen at today’s low of $1,204.60 and then at $1,200.00. Wyckoff’s Market Rating: 3.0
March silver futures prices closed nearer the session low. Silver bulls are fading again and their upside price breakout objective is closing prices above solid technical resistance at the December high of $17.355 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 $16.81 and then at $17.00. Next support is seen at today’s low of $16.425 and then at last week’s low of $16.165. Wyckoff's Market Rating: 3.0.
March N.Y. copper closed down 650 points at 286.90 cents today. Prices closed near the session low and scored a bearish “outside day” down on the daily bar chart. The key “outside markets” were bearish for copper today as the crude oil market was lower and the U.S. dollar index was higher. The copper bears have the solid overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 300.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the contract low of 277.75 cents. First resistance is seen at 290.00 cents and then at 292.50 cents. First support is seen at last week’s low of 2.8655 cents and then at 285.00 cents. Wyckoff's Market Rating: 2.0.
Source: KitcoNews
