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Gold Down On Upbeat U.S. Economic Data, Strong Greenback

Thursday November 17, 2016 13:31
(Kitco News) - Gold prices ended the U.S. day session moderately lower and closed at a 5.5-month low close Thursday. The release of several U.S. economic reports that were mostly stronger than expected and a resulting surge in the U.S. dollar index to a 13-year high pressured the gold and silver markets today. December Comex gold was last down $7.10 an ounce at $1,216.70. December Comex silver was last down $0.147 at $16.785 an ounce.

U.S. economic data Thursday included a weekly jobless claims report that showed a big drop in weekly claims. Also, housing starts in October showed a very strong rise of 25.5%. The Philadelphia business index showed a reading of 7.6 in November from 9.7 in October. The October consumer price index was up 0.4%, which was right in line with market expectations.

Gold and silver managed to hold near steady prices levels in the immediate aftermath of the U.S. reports. However, when the U.S. dollar index started to rally strongly, the metals started to weaken.

Remarks from Fed Chair Janet Yellen in her testimony before the Congress’ joint economic committee saw Yellen suggesting a U.S. rate hike could come soon, but with no specific timeframe. The marketplace did not show a big reaction to her remarks, as she has said the same things recently.

The other key outside market, Nymex crude oil, saw prices are slightly higher as the marketplace debates OPEC’s ability to cut its collective crude oil output ahead of the cartel’s Nov. 30 meeting. The oil bulls are having a good week this week.

(Note: Follow me on Twitter--@jimwyckoff--for breaking market news.)

Technically, December gold futures prices closed nearer the session low and closed at a 5.5-month low close today. The gold bears have the overall near-term technical advantage. A bearish pennant or flag pattern is forming on the daily bar chart. Prices are in a four-month-old downtrend. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,265.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,200.00. First resistance is seen at today’s high of $1,231.10 and then at $1,243.20. First support is seen at today’s low of $1,216.10 and then at this week’s low of $1,211.00. Wyckoff's Market Rating: 3.0

December silver futures prices closed nearer the session low and closed at a five-month low close today. The silver market bears have the 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 $18.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at today’s high of $17.08 and then at $17.235. Next support is seen at this week’s low of $16.62 and then at $16.50. Wyckoff's Market Rating: 3.5.

December N.Y. copper closed up 190 points at 248.65 cents today. Prices closed nearer the session high. The copper bulls have the firm overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the November high of 273.45 cents. The next downside price objective for the bears is closing prices below solid technical support at 235.00 cents. First resistance is seen at 251.20 cents and then at 255.00 cents. First support is seen at this week’s low of 242.60 cents and then at 240.00 cents. Wyckoff's Market Rating: 7.0.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com

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