Gold Weaker as Stronger U.S. Dollar Remains a Bearish Anchor -
Gold is slightly lower and hovering near this week’s nine-month low in early U.S. trading Friday. The rallying U.S. dollar index that this week hit a four-year high continues to limit buying interest in gold and silver. December Comex gold was last down $2.20 at $1,219.70 an ounce. Spot gold was last quoted down $2.80 at $1,219.50. December Comex silver last traded up $0.062 at $17.505 an ounce.In overnight news, Asian and European stock markets followed Wall Street’s Thursday lead to trade lower Friday. European stocks also were pressured by a downbeat German consumer confidence report Friday. U.S. stock indexes are slightly higher in pre-opening electronic trading Friday morning, following the sharp losses posted on Thursday.
The stock market traders and investors are nearly half-way through the historically turbulent months of September and October. Thursday’s selling pressure in U.S. stocks has stock market bulls increasingly worried about price action the next few weeks.
On the geopolitical front, the U.S. military continues to strike the ISIS terrorists in Syria. It would not be surprising to see some heightened risk aversion in the market place as the trading session progresses Friday, heading into the weekend.
There is an important U.S. economic report due for release Friday: the third-quarter GDP estimate, which is expected to show an annual growth rate of 4.6%. That’s a lofty number and I would not be surprised to see a miss to the downside on it. The other report out Friday is the University of Michigan consumer sentiment survey.
Wyckoff’s Daily Risk Rating: 6.0 (The risk aversion seen earlier this week, due to U.S. airstrikes against ISIS terrorists in Syria, has waned significantly. However, risk aversion could pick up later today, heading into the weekend.)
(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off), and 5 being neutral.
The London A.M. gold fixing is $1,222.25 versus the previous P.M. fixing of $1,213.75.
Technically, gold bears have the solid overall near-term technical advantage as prices are in a 2.5-month-old downtrend on the daily bar chart and this week hit a nine-month low. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,237.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,200.00. First resistance is seen at $1,225.00 and then at the overnight high of $1,232.70. First support is seen at $1,215.00 and then at $1,208.80.
December silver futures bears have the solid near-term technical advantage as prices are hovering near this week’s contract and four-year low. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $18.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $17.00. First resistance is seen at the overnight high of $17.725 and then at this week’s high of $18.99. Next support is seen at this week’s contract low of $17.27 and then at $17.00. |
