Resurgent U.S. dollar punishes gold, silver markets

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(Wallace Refiners) – Gold and silver futures prices are sharply lower in midday U.S. trading Wednesday. Gold dropped to a four-week low and silver hit a three-week low. The precious metals are getting pounded by a stronger U.S. dollar index at mid-week. Much to the consternation of the bulls, the safe-haven metals can’t catch a bid despite the keener risk aversion in the marketplace, as seen by a big sell off in the U.S. stock market. December gold futures were last down $29.90 at $1,882.00 and December Comex silver was last down $1.155 at $23.41 an ounce.

Rising Covid-19 pandemic infections in the U.S. and Europe, as well as other parts of the world, are fanning worries new lockdowns are coming this winter, even though they may not be as extreme as seen last spring. Europe is already starting to ramp up its quarantine of some business activities. Concerns about the U.S. presidential election and the transfer of power if Joe Biden wins are also in the marketplace. No new U.S. government financial stimulus package for American citizens is in sight and that’s also adding to downbeat attitudes in the stock markets.

The important outside markets today are fully bearish for the metals, as see the U.S. dollar index is sharply higher. Meantime, Nymex crude oil prices are solidly lower and trading around $37.25 a barrel. If crude oil continues to head south, it’s likely most raw commodity markets will have an anchor on any upside price action. Oil prices are close to hitting multi-month lows, which would produce serious near-term technical damage.

Technically, December gold futures hit a four-week low today and saw a bearish downside “breakout” from the recent sideways trading range. The gold bulls still have the overall near-term technical advantage but are fading. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at the October high of $1,939.40. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the September low of $1,851.00. First resistance is seen at $1,900 and then at this week’s high of $1,913.80. First support is seen at today’s low of $1,869.10 and then at $1,851.00. Wyckoff’s Market Rating: 6.0

December silver futures prices hit a three-week low today. Silver futures bulls still have the slight overall near-term technical advantage but a price uptrend on the daily chart has been negated and the bulls are fading. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the October high of $25.71 an ounce. The next downside price objective for the bears is closing prices below solid support at the September low of $21.81. First resistance is seen at $24.00 and then at today’s high of $24.675. Next support is seen at today’s low of $23.06 and then at the October low of $22.965. Wyckoff’s Market Rating: 5.5.

December N.Y. copper closed down 260 points at 306.75 cents today. Prices closed near mid-range today. The copper bulls have the solid overall near-term technical advantage. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at 330.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 300.00 cents. First resistance is seen at today’s high of 310.65 cents and then at this week’s high of 314.30 cents. First support is seen at today’s low of 304.20 cents and then at 302.00 cents. Wyckoff’s Market Rating: 7.5.