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(Kitco News) – Gold prices fell sharply and reached their lowest level in nearly 2.5 years in the middle of the US trading day on Thursday. Silver prices are also strongly lower. Precious metals are affected by global economic concerns that threaten to weaken commercial and consumer demand for raw commodities, including metals. October gold last fell $36.00 at $1,662.20 and December silver fell $0.324 at $19,245.
The market was quieter overnight and early this morning, but recent hawkish monetary policy comments from central bank officials and notable market analysts seem to have combined with hot inflation readings to dampen the risk appetite seen earlier today. And remember that the stock markets and financial markets are at that time of the year (September and October) when things can get really tough. Gold and silver bulls remain frustrated as market risk aversion is not translating into more safe haven demand for the two metals.
Traders focus on next week’s Federal Open Market Committee meeting, which is expected to see the Federal Reserve raise its key US federal funds rate by 0.75% in an effort to curb problematic price inflation. Precious metals traders calculate that the tighter monetary policies of most of the world’s major central banks will further slow global economic growth which in turn will reduce consumer and commercial demand for the metals.
Global stock markets were mostly slightly higher overnight. US stock indices are lower at midday.
Today the major overseas markets are seeing a sharp drop in NYMEX Crude Oil prices and are trading around $85.50 per barrel. The US dollar index is close to stabilizing in early US trading. The yield on the 10-year US Treasury is around 3.44%.
Technically, October gold futures prices hit a 2.5-year low today. Gold futures bears have a strong overall technical advantage in the near term and are gaining more traction today. The next bullish price target for the bulls is to produce a close above the solid resistance at $1,700.00. The bears’ next bearish price target in the near term is pushing futures prices below the strong technical support level at $1,600.00. We see the first resistance at $1,675.00 and then at $1,686.30. First support is seen at $1,650.00 and then at $1,635.00. Wyckoff Market Rating: 1.5.
The December silver futures bears have a strong overall technical advantage in the near term. The next bullish price target for the silver bulls is to close prices above the strong technical resistance at $21.00. The next target for the bears downtrend price is a price close below the strong support level at $18.00. We notice the first resistance at the day’s high at $19.625 then $20.00. The next support appears at $19.00 and then this week’s low at $18.775. Wyckoff Market Rating: 2.5.
Copper in New York in December closed down 380 points at 348.20 cents today. Prices closed near the session low today. Copper bears have the overall technical advantage in the near term. Copper bulls’ next bullish price target is to push and close prices above strong technical resistance at the August high of 378.35 cents. The bears’ downtrend price next target is a price close below strong technical support at the July low of 315.55 cents. First resistance was seen at 355.00 cents then at this week’s high at 369.25 cents. First support is seen at the September low at 336.10 cents and then at 330.00 cents. Wyckoff Market Rating: 3.0.
Disclaimer: The opinions expressed in this article are those of the author and may not reflect the views of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; However, Kitco Metals Inc. cannot. Nor does the author guarantee this accuracy. This article is for informational purposes only. It is not a solicitation to conduct any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. does not accept The author of this article will be liable for losses and/or damages arising from the use of this publication.
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