Gold Weakens on Technical Selling, Lower Oil in Thin Trading

P.M. Kitco Roundup: Gold Weakens on Technical Selling, Lower Oil in Thin Trading

Wednesday December 24, 2014 1:52 PM

(Note: I want to take this opportunity to wish all of my valued Kitco readers Happy Holidays. I have a great job, being able to provide you with my daily perspective on the markets. Thanks for your loyalty.—Jim)
 Gold prices ended the U.S. day session modestly lower and closed at a fresh three-week low close in quieter trading Wednesday. The yellow metal was pressured by more chart-based selling amid the overall bearish technical posture of the market. Lower crude oil prices were also a bearish “outside market” factor working against the precious metals markets Wednesday. Markets were also generally quiet overnight on this Christmas Eve day. Most U.S. markets closed early today and many traders and investors have already checked out for the week, if not for the rest of the year. February Comex gold was last down $2.80 at $1,175.20 an ounce. Spot gold was last down $2.00 at $1,175.40. March Comex silver last traded down $0.002 at $15.765 an ounce.
The buzz in the market place has been the dramatic rebound in the U.S. stock indexes the past week. The indexes were left for dead last week, but have come roaring back to establish record highs in the Dow (above 18,000) and S&P stock indexes. The big money flows back into the stock markets worldwide have dented many raw commodity markets, including gold and silver.
Market watchers are also discussing Tuesday’s big third-quarter GDP growth number, at up 5.0%, which is the strongest economic growth in a decade. The report falls squarely into the camp of U.S. monetary policy hawks—also bearish for the metals.
The Russian ruble has stabilized this week, following last week’s serious erosion against the U.S. dollar and other major currencies. Reports Tuesday said the Russian central bank sold $420 million of its foreign currency reserves last week to support the beleaguered ruble. Reports today said a major credit ratings agency is considering downgrading Russia’s credit rating to junk status.
Technically, February gold futures prices closed nearer the session low and closed at a three-week low close 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 this week’s high of $1,203.60. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,150.00. First resistance is seen at today’s high of $1,181.20 and then at $1,185.00. First support is seen at this week’s low of $1,170.70 and then at $1,160.00. Wyckoff’s Market Rating: 2.0
March silver futures prices closed near mid-range today. 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 this week’s high of $16.175. Next support is seen at this week’s low of $15.53 and then at $15.25. Wyckoff's Market Rating: 2.0.
March N.Y. copper closed down 180 points at 284.80 cents today. Prices closed nearer the session low today. The copper bears have the solid overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 295.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the contract low of 277.75 cents. First resistance is seen at today’s high of 287.40 cents and then at this week’s high of 290.50 cents. First support is seen at last week’s low of 282.70 cents and then at 280.00 cents. Wyckoff's Market Rating: 2.0.
By Jim Wyckoff