Gold Ends Mixed; Short Covering and Bargain Hunting Offset by Strong U.S. Dollar
New York (Sept 29) Gold futures prices ended the U.S. day session modestly higher, while the spot gold market was modestly lower Monday. Tepid short covering by the futures traders and some light bargain hunting were featured, following recent solid selling pressure that drove prices to a nine-month low last week. The sell-off in the U.S. stock market Monday also aided the gold market bulls. However, the powerful rally in the U.S. dollar index remains a major bearish underlying factor for the precious metals markets. December Comex gold was last up $2.20 at $1,217.60 an ounce. Spot gold was last quoted down $2.40 at $1,217.50. December Comex silver last traded up $0.008 at $17.545 an ounce.
The U.S. dollar hit a six-year high against the Japanese Yen and a 22-month high against the Euro Monday. Ideas the U.S. Federal Reserve will begin to tighten its monetary policy, while other major central banks do the opposite, have boosted the dollar and pressured the Euro currency and other major currencies. The appreciation of the greenback on the foreign exchange market has been a bearish weight on the raw commodity sector, including precious metals, as most major raw commodities are priced in U.S. dollars on the world market.
China is celebrating a week-long national holiday this week, which could make for quieter trading in many markets. The market place is also keeping a close, wary eye on a big pro-democracy demonstration presently occurring in Hong Kong. Any escalation in the Hong Kong protesting could produce safe-haven buying in the gold market.
There was another downbeat economic report coming out of the European Union Monday. The EU’s Economic Sentiment Indicator fell to 99.9 in September from 100.6 in August, for the lowest reading of the year. That news helped to pressure the beleaguered Euro currency.
U.S. economic data due for release Monday included personal income and outlays, pending home sales, and the Texas manufacturing outlook survey. The data had little impact on the market place. The big economic data points of the week come with Thursday’s monthly meeting of the European Central Bank and the U.S. employment report on Friday.
The London P.M. gold fix was $1,219.50 versus the previous London A.M. fixing of $1,217.75.
Technically, December gold futures prices closed near mid-range Monday. Gold bears still have the firm overall near-term technical advantage as prices are hovering not far above last week’s nine-month low and an 11-week-old downtrend is in place on the daily bar chart. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,237.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,200.00. First resistance is seen at Monday’s high of $1,223.90 and then at $1,230.00. First support is seen at Friday’s low of $1,212.80 and then at last week’s low of $1,206.60. Wyckoff’s Market Rating: 1.5
December silver futures prices closed near mid-range and saw tepid short covering in a bear market Monday. Prices are hovering near last week’s four-year low. An 11-week-month-old downtrend is in place on the daily bar chart. The bears have the solid overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $18.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.00. First resistance is seen at Friday’s high of $17.725 and then at last week’s high of $17.99. Next support is seen at today’s low of $17.43 and then at the contract low of $17.27. Wyckoff's Market Rating: 1.0.
December N.Y. copper closed up 130 points at 304.80 cents Monday. Prices closed nearer the session high after hitting a 14-week low early on today. Short covering was featured. Copper bears still have the overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 312.50 cents.