Gold Weaker as Rallying U.S. Dollar Remains a Major Bearish Outside Market Force
New York (Nov 3) Gold ended the U.S. day session modestly lower, with Comex futures prices closing at a fresh four-year-low close Monday. The precious metals markets are still anchored by the strong rally in the U.S. dollar index. December Comex gold was last down $4.00 at $1,167.60 an ounce. Spot gold was last quoted down $5.60 at $1,167.75. December Comex silver last traded down $0.036 at $16.07 an ounce.
The U.S. dollar index hit a four-year high Monday. This key “outside market” and its recent price strength have been a significant bearish weight on many raw commodity markets. Crude oil prices are hovering near a two-year low at present, and that’s also a negative for the raw commodity sector. Crude oil is arguably the leader of the raw commodity complex.
In overnight news, the official China purchasing managers index (PMI) was reported on Saturday and fell to 50.8 in October, from 51.1 in September. The number was slightly below expectations but was above the HSBC PMI of 50.4, which was reported Monday. The HSBC September PMI reading was 50.2. The European Union manufacturing PMI was reported Monday and came in at 50.6 in October, versus expectations for a reading of 50.7 and a September figure of 50.3.
There are two big economic data points this week: the monthly meeting of the European Central Bank on Thursday and the U.S. employment situation report on Friday. U.S. mid-term elections also take place on Tuesday.
The London P.M. gold fix was $1,167.75 versus the previous London A.M. fixing of $1,170.75.
Technically, December gold futures prices closed near mid-range and closed at a fresh four-year low close today. The gold bears have the strong near-term technical advantage. Gold prices have also pushed below what was major longer-term technical support at the $1,183.00 area. A breach of the support level opens the door to a significant leg down in prices, and a move to the $1,000 level in the coming months cannot be ruled out. The gold bulls’ next upside near-term price breakout objective is to produce a close above what is now solid technical resistance at $1,183.00. Bears’ next near-term downside breakout price objective is closing prices below solid technical support at $1,150.00. First resistance is seen at $1,175.00 and then at $1,180.00. First support is seen at last week’s low of $1,160.50 and then at $1,155.00. Wyckoff’s Market Rating: 1.0
December silver futures prices closed nearer the session high. Prices Friday hit a contract and four-year low. The silver bears have the strong overall near-term technical advantage. Prices are in a four-month-old downtrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $17.00 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 $16.25 and then at Friday’s high of $16.515. Next support is seen at $16.00 and then at the contract low of $15.635. Wyckoff’s Market Rating: 1.0.
December N.Y. copper closed up 160 points at 306.25 cents today. Prices closed nearer the session high today on short covering. The bears still have the near-term technical advantage. Copper bulls’ next upside breakout objective is pushing and closing prices above solid technical resistance at 315.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 300.00 cents. First resistance is seen at today’s high of 307.00 cents and then at 310.00 cents. First support is seen at 304.00 cents and then at today’s low of 302.25 cents. Wyckoff’s Market Rating: 4.0.