Comex gold prices are moderately lower in early U.S. trading Thursday, on some profit-taking pressure and chart consolidation after prices on Wednesday hit a 6.5-month high. The key âoutside marketsâ are in a bearish posture for the precious metals early Thursday, as the U.S. dollar index is higher and crude oil prices are weaker. December gold last traded down $8.70 at $1,763.10 an ounce. Spot gold was last quoted down $8.80 an ounce at $1,761.25. December Comex silver last traded down $0.248 at $34.34 an ounce.
In overnight news, the much-anticipated HSBC China manufacturing PMI came in at a reading of 47.8 in the latest month, which was the eleventh straight month of contraction in Chinaâs manufacturing sector. Asian stock markets fell on the China news, while raw commodity markets, including gold and silver, were also seeing some selling pressure on the weak China data. The market place is also uneasy regarding a serious territorial dispute between China and Japan regarding ownership of a small chain of islands.
Meantime, a closely watched Spanish government debt auction went off well Thursday amid good investor demand. The recent pledge by the European Central Bank to backstop the troubled EU nationsâ debt auctions has injected some stability into the EU financial system. However, offsetting that positive EU news was more generally dour economic data coming out of Europe Thursday. Donât be surprised if the EU sovereign debt crisis once again becomes a major market factor in the coming weeks. If such is the case, and with the recent further easing of monetary policy by the major central banks of the world (printing money), this should all augur well for the gold market bulls, given the yellow metalâs safe-haven asset status and with many reckoning gold is only becoming a more valuable reserve currency.
The U.S. dollar index is solidly higher in early trading Wednesday, on more short covering. The greenback bears still have the overall near-term technical advantage as a two-month-old downtrend line remains in place on the daily bar chart. Meantime, crude oil prices are modestly lower Thursday morning and did hit a fresh six-week low overnight. Oil bulls have faded badly this week to suggest a near-term market top is in place. These two key âoutside marketsâ will continue to have a significant daily influence on precious metals prices.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the U.S. flash manufacturing PMI, leading economic indicators, and the Philadelphia Federal Reserve business outlooksurvey.
The London A.M. gold fixing is $1,760.00 versus the previous P.M. fixing of $1,766.75.
Technically, December gold futures bulls still have the solid overall near-term technical advantage. The gold bullsâ next upside price breakout objective is to produce a close above solid technical resistance at the 2012 high of $1,800.90. Bears\' next near-term downside price objective is closing prices below solid technical support at last weekâs low of $1,720.00. First resistance is seen at the overnight high of $1,774.90 and then at this weekâs high of $1,781.80. First support is seen at the overnight low of $1,758.10 and then at this weekâs low of $1,753.20.
December silver futures are also seeing some profit taking and chart consolidation, but the bulls are still in strong near-term technical command. Prices are in a two-month-old uptrend on the daily bar chart. Bullsâ next upside price breakout objective is closing prices above solid technical resistance at $36.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at last weekâs low of $32.51. First resistance is seen at the overnight high of $34.80 and then at this weekâs high of $35.10. Next support is seen at the overnight low of $34.14 and then at this weekâs low of $33.845.
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By Jim Wyckoff, contributing to Kitco News