Gold Ends Sharply Lower, Hits 3-Week Low, on Technical Selling, Lower Oil
New York (Dec 22) Gold prices ended the U.S. day session sharply lower and hit a three-week low Monday. Technical selling was featured amid a lack of fresh, bullish fundamental news. Lower oil prices were also a bearish “outside market” force working in favor of the precious metals bears Monday. Thin volume, as many players are already off for the Christmas week, likely exacerbated the downside price move in gold Monday. February Comex gold was last down $21.40 at $1,174.70 an ounce. Spot gold was last down $19.80 at $1,174.75. March Comex silver last traded down $0.38 at $15.65 an ounce.
Trading activity could be active Tuesday, as the main U.S. economic report is on tap this week: the third-quarter gross domestic product report. GDP is expected to be up 4.3%, year-on-year, versus the previous reading of up 3.9%. Tuesday could be the busiest trading day of the week as there are also several other key U.S. economic reports due out. Look for trading activity to then quickly fade ahead of the Christmas holiday Thursday, and to remain light until the new year begins.
European and Asian markets were also quieter overnight. The feature in Europe was the Italian 10-year bond yield fell to a record low of 1.68%, reports said. Ironically, EU country bond yields are falling when anxiety about the health of the European Union is rising. A main reason for this paradox is that there are also heavy odds in favor of the European Central Bank initiating quantitative easing of its monetary policy next year. That prospect is leading investors to put their likely deflating Euros into even shaky EU governments’ debt.
The Russian ruble is stable Monday, following last week’s turmoil. Last week the ruble fell to 80 versus the U.S. dollar and was trading at 57 to the greenback on Monday.
The London P.M. gold fix was $1,195.25 versus the previous London A.M. fixing of $1,195.25.
Technically, February gold futures prices closed near the session low and hit a three-week low today. The gold bears have the firm overall near-term technical advantage. Their next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,225.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,150.00. First resistance is seen at $1,182.00 and then at $1,190.00. First support is seen at today’s low of $1,174.20 and then at $1,170.00. Wyckoff’s Market Rating: 2.0
March silver futures prices closed nearer the session low and closed at a three-week low close today. Prices also scored a bearish “outside day” down on the daily bar chart. Silver bears have the solid overall near-term technical advantage. Bulls’ next 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 $15.00. First resistance is seen at $16.00 and then at today’s high of $16.175. Next support is seen at today’s low of $15.53 and then at $15.25. Wyckoff's Market Rating: 2.0.