Gold Hits 10-Mo. Low on Strong Greenback, Investor Optimism

By Jim Wyckoff

Wednesday November 30, 2016 13:16

 (Kitco News) - Gold prices ended the U.S. day session solidly lower and hit a fresh 10-month low Wednesday. A strong U.S. dollar, generally upbeat trader and investor optimism recently, and bearish technicals continue to pressure the yellow metal. February Comex gold was last down $14.10 an ounce at $1,176.60. March Comex silver was last down $0.185 at $16.555 an ounce.

A stronger-than-expected U.S. ADP national employment report and an upbeat ISM Chciago business survey helped to push gold prices new daily lows. The November ADP number came in at up 216,000, which was well above market expectations. Today’s U.S. economic reports and fall into the camp of the U.S. monetary policy hawks, who want U.S. interest rates to rise sooner rather than later. The positive U.S. data today helped to push the U.S. dollar index firmly higher today.

The OPEC meeting Wednesday in Vienna, Austria saw the oil cartel put in place a plan to cut its collective crude oil production. Crude oil prices were sharply higher on the reports coming out of Vienna. Reports did say Iran does not want to immediately scale back its oil output. The sharply higher oil prices Wednesday did little to help the gold and silver market bulls.

There is also marketplace uncertainty regarding the December 4 Italian referendum on constitutional reforms. A “no” vote on the reforms could eventually put Italy in violation of European Union rules. A no vote could help to boost the gold market as uncertainty and anxiety would likely become elevated, regarding the ultimate survival of the European Union.

Technically, February gold futures prices closed nearer the session low, hit a 10-month low and closed at a bearish monthly low close today. The gold bears have the solid overall near-term technical advantage and gained more power today. Prices are in a five-month-old downtrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,200.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,150.00. First resistance is seen at $1,185.00 and then at $1,190.00. First support is seen at today’s low of $1,171.30 and then at $1,160.00. Wyckoff's Market Rating: 2.0

March silver futures prices closed near the session low today and are very close to the recent six-month low. The silver market bears have the solid overall near-term technical advantage. Prices are in a five-month-old downtrend on the daily bar chart. 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 $16.00. First resistance is seen at today’s high of $16.83 and then at this week’s high of $16.945. Next support is seen at this week’s low of $16.47 and then at last week’s low of $16.245. Wyckoff's Market Rating: 2.0.

March N.Y. copper closed up 200 points at 263.00 cents today. Prices closed nearer the session high today. The copper bulls have the firm overall near-term technical advantage. However, recent price action raises the specter of a bearish double-top reversal pattern playing out on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at this week’s high of 275.30 cents. The next downside price objective for the bears is closing prices below solid technical support at 250.00 cents. First resistance is seen at today’s high of 265.60 cents and then at 267.70 cents. First support is seen at 260.00 cents and then at today’s low of 255.05 cents. Wyckoff's Market Rating: 7.0.