Gold Rebounds From Friday’s Downside Debacle
(Kitco News) - Gold prices ended the U.S. day session modestly higher Monday, on a bounce after a rapid decline in late-morning action last Friday. December Comex gold was last up $4.80 an ounce at $1,279.00. December Comex silver was up $0.174 at $17.045 an ounce.
Last Friday’s quick drop in gold prices began in the futures market, when a likely very large sell order hit hard a lackadaisical trading affair up to that point. Some blamed a quick move higher in the U.S. dollar index Friday morning as the culprit for the selling pressure in gold. Such inexplicable, rapid price moves are not common in the markets, but they seem to occur more often in gold than in most other markets, and are usually touched off by big moves in the futures markets.
Market traders this week are worried about progress bogging down on the U.S. tax-reform legislation working its way through Congress. That could pressure the world stock markets and in turn be a bullish development for safe-haven gold. Also, lower closes in the U.S. stock indexes last Friday produced some technical damage, to begin to suggest near-term market tops are in place. Bearish key reversals down on the daily bar charts were confirmed in the S&P and Nasdaq stock index futures.
Reports said the value of the cryptocurrency bitcoin has plunged by around 25% in just a few days’ time. This development is likely lending some support to the safe-haven gold market.
The key outside markets on Monday saw U.S. dollar index modestly higher. The greenback bulls have the slight overall near-term technical advantage. Meantime, Nymex crude oil futures prices traded near steady and are trading just below $57.00 a barrel. It is still my bias that Nymex crude won’t be able to sustain prices at or above $60.00 a barrel.
There was no major U.S. economic data released Monday but the pace picks up on Tuesday and the rest of the week.
Technically, December gold futures prices closed nearer the session high. Prices are back in a sideways trading range on the daily bar chart. Bulls and bears are back on a level overall near-term technical playing field. Gold 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 pushing prices below solid technical support at the October low of $1,262.80. First resistance is seen at $1,285.00 and then at last week’s high of $1,289.50. First support is seen at today’s low of $1,274.40 and then at $1,270.00. Wyckoff's Market Rating: 5.0
December silver futures prices closed nearer the session high today. The silver bulls and bears are back on a level overall near-term technical playing field. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the October low of $16.345. First resistance is seen at last week’s high of $17.27 and then at $17.50. Next support is seen at today’s low of $16.82 and then at $16.60. Wyckoff's Market Rating: 5.0.
December N.Y. copper closed up 445 points at 312.05 cents today. Prices closed nearer the session high today. The copper bulls have the overall near-term technical advantage but have faded as prices have been trending lower for four weeks. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the October high of 325.95 cents. The next downside price objective for the bears is closing prices below solid technical support at 300.00 cents. First resistance is seen at today’s high of 313.65 cents and then at 317.30 cents. First support is seen at 310.00 cents and then at today’s low of 306.80 cents. Wyckoff's Market Rating: 6.0.