Gold Price Falls To Another 4-Week Low on Hawkish Yellen Remarks, Higher U.S. Dollar Index
San Francisco (Nov 4) Gold ended the U.S. day session moderately lower, near the session low and dropped to another four-week low Wednesday. Some hawkish “Fed speak” and upbeat U.S. economic data hit the precious metals markets today. Gold prices are now closing in on major psychological support at the $1,100.00 level. December Comex gold was last down $7.50 at $1,106.50 an ounce. December Comex silver was last down $0.179 at $15.06 an ounce.
The U.S. dollar index was boosted Wednesday when U.S. Federal Reserve Chair Janet Yellen testified to a U.S. House committee on bank regulations. She said a Fed rate hike in December is a “live possibility” due to better U.S. economic data over the past few months and her expectations of more of the same in the coming months. Fed Vice Chair Stanley Fischer speaks to the National Economists Club later today.
The greenback also benefited from an upbeat U.S. ISM non-manufacturing report issued at late-morning. Gold prices began to back down from earlier gains following the ISM report.
The U.S. ADP national employment report for October came in at up 182,000, which was in line with market expectations and had little impact on the marketplace. Traders and investors are looking ahead to Friday’s U.S. employment report from the Labor Department, which is arguably the most important data point of the week, if not the month. The key non-farm payrolls number is forecast to be up around 185,000 in October, following a rise of 142,000 jobs in September.
In overnight news, China’s president on Wednesday said his country’s economic growth continues to slow due to domestic and global uncertainties. President Xi Jinping said the Chinese economy could continue to grow at “about 7%” annually. He said a minimum annual growth rate of 6.5% is needed to see China’s economy double from 2010 to 2020, which is what the government’s five-year economic plans envision. In another report, China’s banking industry said its bad loan ratio is rising, which is reflective of a struggling economy.
In other news Wednesday, producer prices in the Euro zone were reported down 0.3% in September versus August and down 3.1%, year-on-year. This is yet another clue the European Union is teetering on the brink of serious deflationary price pressures, and that more stimulus from the European Central Bank is warranted.
The Euro zone October composite purchasing managers’ index (PMI) was 53.9 versus 53.6 in September. The October reading was in line with expectations. A number above 50.0 suggests growth in the sector.
Technically, December gold futures prices closed near the session low and hit another four-week low today. The 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 $1,135.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,100.00. First resistance is seen at $1,112.00 and then at today’s high of $1,122.30. First support is seen at today’s low of $1,106.00 and then at the October low of $1,103.80. Wyckoff’s Market Rating: 2.5
December silver futures prices closed near the session low and hit another four-week low today. The silver market bears have the firm overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $16.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.50. First resistance is seen at today’s high of $15.325 and then at this week’s high of $15.55. Next support is seen at $15.00 and then at $14.75. Wyckoff's Market Rating: 2.5.
December N.Y. copper closed down 130 points at 231.75 cents today. Prices closed near the session low. The key “outside markets” were fully bearish for copper today as the U.S. dollar index was sharply higher and crude oil prices were solidly lower. Copper bears have the firm overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the October high of 243.75 cents.
Source: KitcoNews
