Gold price weaker on routine corrective pullback

Date:

(Kitco News) – Gold prices are moderately down in early U.S. trading Thursday, on a normal downside correction in an uptrend and following recent good gains that saw the yellow metal hit a six-month high Wednesday. A solid rebound in the U.S. dollar index today is a daily outside-market negative for the metals markets. February gold was last down $7.10 at $2,060.00. March silver was last up $0.037 at $25.48.

Asian and European markets were mixed to firmer in overnight trading. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.

In overnight news, Eurozone inflation fell more than expected. The bloc’s November consumer price index came in at up 2.4%, year-on-year, compared to up 2.9% in October and forecasts for up 2.8% in November. A Dow Jones Newswire headline today reads: “Euro zone inflation fell more than expected, putting ECB rate cuts into view.”

Meantime, China got some more dour economic news Thursday as its November official manufacturing purchasing managers index (PMI) slipped to 49.4 from 49.5 in October. That marks the second month in a row of the manufacturing PMI being below 50.0, which suggests contraction in the sector. China’s services PMI dropped to 49.3 in November from 50.1 in October. Today’s China data is  bearish for the metals, suggesting weaker demand for them coming from the world’s second-largest economy.

The key outside markets today see the U.S. dollar index solidly higher. Nymex crude oil prices are higher and trading around $78.50 a barrel. Reports say OPEC, at its meeting today, will make additional cuts to the cartel’s collective crude oil production. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.29%.



U.S. economic data due for release Thursday includes the weekly jobless claims report, personal income and outlays that include more personal consumption expenditures (PCE) inflation numbers, the Chicago ISM business survey, pending home sales and monthly retail chain store sales.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold futures bulls have the firm overall near-term technical advantage. Prices are in a six-week-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in March futures above solid resistance at $2,100.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. First resistance is seen at the overnight high of $2,067.40 and then at this week’s high of $2,072.70. First support is seen at $2,050.00 and then at this week’s low of $2,030.00. Wyckoff’s Market Rating: 7.0.

Live 24 hours silver chart [ Kitco Inc. ]

The silver bulls have the firm overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Silver bulls’ next upside price objective is closing March futures prices above solid technical resistance at the July high of $26.10. The next downside price objective for the bears is closing prices below solid support at $23.50. First resistance is seen at this week’s high of $25.68 and then at the August high of $25.775. Next support is seen at $25.00 and then at this week’s low of $24.68. Wyckoff’s Market Rating: 7.0.

Try out my “Markets Front Burner” email report. My next one is due out today and is going to be entitled, “When China sneezes…” Front Burner is my best writing and analysis, I think, because I get to look ahead at the marketplace and do some market price forecasting. And it’s free! Sign up to my new, free weekly Markets Front Burner newsletter, at  https://www.kitco.com/services/markets-front-burner.html .

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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