Gold Price Sharply Lower, Hits 10-Mo. Low, Amid Surging Greenback
New York (Dec 15) Gold prices are sharply lower and fell to another 10-month low in early U.S. trading Thursday. Silver prices are also getting hit hard to the downside and hit an eight-month low today. A powerful rally in the U.S. dollar index has hit the raw commodity sector hard Thursday, including the precious metals. February Comex gold was last down $32.90 an ounce at $1,130.50. March Comex silver was last down $1.156 at $16.085 an ounce.
The feature in the world marketplace Thursday is a surging U.S. dollar index that soared to a 13-year high overnight. The greenback is the beneficiary of a U.S. interest rate hike on Wednesday that was accompanied by a surprisingly hawkish tone on monetary policy from the Federal Reserve. There is now talk the Fed could raise interest rates up to three times in 2017.
Victims of the sharp appreciation of the U.S. dollar are raw commodity markets that are priced in U.S. dollars on the world markets, including gold and silver. World stock markets also set back overnight, following the lead of U.S. share declines posted Wednesday. European stocks did post a rebound from losses suffered earlier in the session Thursday. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.
World government bond markets are again under selling pressure (rising yields) amid the specter of the Federal Reserve and other major central banks of the world beginning to rein in their heretofore loose monetary policies. The U.S. 10-year Treasury bond’s yield rose to a two-year high of 2.6% Thursday, in the wake of the Fed rate hike.
The other outside market on Thursday sees crude oil prices trading slightly higher. The oil bulls appear to be tired after spiking prices to a 16-month high earlier this week. In fact, Monday’s spike high and then prices backing way off are technical clues the crude oil market has put in a near-term top.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the consumer price index, real earnings, the Empire State manufacturing survey, the Philadelphia Fed business survey, the U.S. flash manufacturing PMI, the NAHB housing market index, and Treasury international capital data.
Technically, February gold futures bears have the solid overall near-term technical advantage and have gained more power late this week. Prices have been trending lower for over five months. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,168.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,100.00.
Source: KitcoNews
