Gold, silver slide as USDX rallies, crude oil sells off
Gold and silver prices are lower in midday U.S. trading Wednesday, pressured by solid gains in the U.S. dollar index and sharp losses in crude oil. Better risk appetite in the general marketplace this week is also a bearish element for the safe-haven metals. December gold was last down $8.80 at $1,992.90. December silver was last down $0.194 at $23.675.
The key outside markets today see the U.S. dollar index solidly higher after hitting an 11-week low Tuesday. Nymex crude oil prices are sharply lower and trading around $74.75 a barrel. Reports today said the OPEC-plus cartel postponed its weekend meeting in Vienna because members are in disagreement on further oil-production cuts. Meantime, the yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.428%.
U.S. stock indexes are higher at midday and at multi-week highs amid the better risk appetite in the marketplace. It's a quieter trading week as the U.S. Thanksgiving holiday is on Thursday, and Friday is typically one of the quietest U.S. trading days of the year. Look for U.S. traders to hit the exit doors early today, to get a jump on the holiday.
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The marketplace quickly digested the minutes from the last FOMC meeting of the Federal Reserve, which were released Wednesday afternoon. The FOMC minutes said the committee members noted the risk of higher-than-expected inflation and weaker-than-expected U.S. economic growth. The FOMC minutes said more evidence is needed before the Fed shifts its stance on U.S. interest rates. The marketplace took that to mean the Fed will continue to pause on its rate hikes for a few months as it weighs incoming economic data. Markets showed little reaction Tuesday afternoon as the minutes contained no surprises.
Technically, the gold futures bulls have the overall near-term technical advantage. Bulls' next upside price objective is to produce a close in December futures above solid resistance at the October high of $2,019.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,935.60. First resistance is seen at $2,000.00 and then at this week's high of $2,009.80. First support is seen at Tuesday's low of $1,979.90 and then at this week's low of $1,967.20. Wyckoff's Market Rating: 6.0
The silver bulls have the overall near-term technical advantage. Silver bulls' next upside price objective is closing December futures prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at the November low of $21.925. First resistance is seen at $24.00 and then at the November high of $24.22. Next support is seen at this week's low of $23.30 and then at $23.00. Wyckoff's Market Rating: 6.0.
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By
Jim Wyckoff
For Kitco News
David