Gold Price Weaker; Lower Crude Oil Pressures Metals

New York (Oct 26)  Gold prices are slightly lower in early U.S. trading Wednesday. A slumping crude oil market this week is weighing on the precious metals and the raw commodity sector, in general. December Comex gold was last down $1.80 an ounce at $1,271.80. December Comex silver was last down $0.075 at $17.71 an ounce.

The key “outside markets” on Wednesday see Nymex crude oil prices lower and dropping back below the key $50.00-per-barrel level. There are growing doubts among oil market watchers that OPEC will be able to effectively lower its collective crude oil output. Meantime, the U.S. dollar index is also lower on profit taking after hitting an 8.5-month high Tuesday. The recent strong greenback is also somewhat limiting buying interest in the raw commodity markets, including the precious metals.

The big data point for this week will be Friday’s U.S. gross domestic product report for the third quarter, which is expected to see a rise of 2.5%, year-on-year. Many markets could become more volatile in the immediate aftermath of that report.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, leading economic indicators, new residential sales, and the weekly DOE liquid energy stocks report.

Technically, December gold futures bears have the overall near-term technical advantage. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at the October low of $1,243.20.

Source: KitcoNews