Gold Price Ends Weaker in Choppy Trading as Prices Hover Near 5.5-Year Low
New York (Nov 12) December gold futures prices ended a very choppy U.S. trading session lower and hit a fresh contract low Thursday. December gold dropped below what was strong chart support at the summertime low of $1,073.70 in mid-morning trading. This triggered sell stop orders and produced fresh near-term technical damage to suggest still more selling pressure in the coming days. Gold futures prices are presently hovering near a 5.5-year low. December Comex gold was last down $4.00 at $1,080.90 an ounce. December Comex silver was last down $0.013 at $14.25 an ounce.
A drop below the summertime low of $1,072.30, basis nearby Comex gold futures, would produce longer-term chart damage, to suggest a challenge of major psychological support at the $1,000.00 level in the coming weeks. On a longer-term technical basis, gold futures prices have been trending lower since the September 2011 all-time high of $1,923.70 an ounce.
Gold prices did briefly rally and push above unchanged in late morning trading. Bargain hunters stepped in to "buy the dip." The shorter-term futures traders who were short the market were also forced to abruptly cover those short positions, to also aid in the rapid price recovery. However, prices quickly lost altitude again and fell below unchanged.
The U.S. jobless claims report released Thursday morning it came in at 276,000 claims in the latest week, which was the same as last week. Metals prices saw little reaction to the news.
There were several Federal Reserve officials who spoke to the media and/or at meetings today. Their comments were closely monitored by the market place but none of the Fed officials’ remarks had a significant impact on the markets. There were no signs from these Fed officials that the U.S. central bank will not raise interest rates in December, as much of the marketplace now reckons.
In overnight news, European Central Bank President Mario Draghi delivered a speech to EU lawmakers Thursday, which was deemed dovish on European Central Bank monetary policy. Draghi implied the ECB could ease monetary policy as soon as December. It could well be the ECB eases its monetary policy in the same month the U.S. Federal Reserve tightens its monetary policy.
Meantime, there was more downbeat economic data coming from the Euro zone Thursday. Industrial output in the bloc fell by 0.3% in September and was up 1.7% on the year. A two-year German bond auction (Schatz) saw the average yield fall to a record low of -0.37% Thursday. That’s a signal of safe-haven demand amid the keen economic uncertainties in the EU.
The World Gold Council has reported demand for gold in the third quarter rose by 8% worldwide. Demand in China soared by 70%, while demand in India rose 6% in the quarter. China and India are the two largest gold importers in the world.
The key “outside markets” on this day saw Nymex crude oil prices oil hit a 2.5-month low below $42.00 a barrel, amid a glut of oil worldwide. The U.S. dollar index was weaker on a corrective pullback after hitting a 6.5-month high earlier this week.
Technically, December gold futures prices closed near mid-range and hit a new contract low today. Prices are hovering near a 5.5-year low. The gold bears have the solid overall near-term technical advantage and gained more power today. Lower price action on Friday would likely produce longer-term chart damage to suggest a challenge of the $1,000.00 mark. Prices are in a four-week-old downtrend on the daily bar chart. 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 pushing prices below solid longer-term technical support at 1,072.30, which is the summertime low, basis nearby futures. First resistance is seen at today’s high of $1,089.00 and then at this week’s high of $1,094.90. First support is seen at today’s contract low of $1,173.00 and then at $1,072.40. Wyckoff’s Market Rating: 1.0
December silver futures prices closed nearer the session low and hit another 10-week low today. The silver market bears have the solid overall near-term technical advantage. Prices are in a steep three-week-old downtrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $15.00 an ounce.
Source: KitcoNews
