US Gold futures prices finished pit trade sharply lower Tuesday, tapping a 4 wk low and closed below what was psych support mark at the 1,700.00.
New technical selling pressure that started in thin overnight Asian trading took over Tuesday in the US.
Feb Gold last traded down 24.60 at 1,696.60 oz.
Spot Gold was last quoted down 21.20 at 1,695.25 oz.
Mar Comex Silver last traded down 0.799 at 32.97 oz.
There was speculation in the Gold pit Tuesday that the fast drop in prices in early Asian trade was tied to last week’s sharp drop in Gold prices, that POV could not be confirmed even though Tuesday’s fall was also mysterious like last week. It was curious that heavy sell orders hit the gold market Tuesday when New York and London markets were closed and at a time when Asian trading was light.
Trading in the Gold and Silver markets has become choppy and sideways as the end of the year comes on. It would not be surprising to see this type of trading action continue until the start of the new year barring an economic or geopolitical surprise to jolt the market in the coming 4 weeks.
In overnight news: the Euro currency hit a 6 month high against the USD and European stocks gained on ideas the European Union sovereign debt crisis has stabilized for the time being. Traders and investors in Europe welcomed the move by Greece Monday to buy back up to EUR 10-B of its outstanding bonds at a price from 30 to 40 cents on the dollar. Spanish and Italian bond yields have declined this week suggesting a stabilizing overall EU debt crisis.
In the US: the focus of the market is on the “F-Cliff” tax increases and spending cuts that is approaching. A fresh Republican offer put on the table Monday was not deemed by the Democrats as sufficient. US lawmakers are still fencing the matter, with the market now paying less attention to the politicians’ rhetoric. While the market place presently perceives there will be a last-minute agreement among US lawmakers to avoid the F-Cliff, the overall situation has been a bearish drag on many markets, including the raw commodities and stock markets.
The market is starting to look ahead to next week’s last Federal Reserve FOMC meeting of the year, on 10-11 December.
The “Operation Twist” program ends and the FOMC members must decide whether to extend the bond-buying program. Many believe the Fed will continue to purchase US Treasuries and implement “QE-4” at next week’s meeting. That would be raw-commodity market Bullish, including Bullish for the precious metals markets.
The USD index was lower Tuesday and hit a fresh 6-wk low. The Greenback Bears have downside technical momentum.
Crude Oil prices were weaker Tuesday. Trading in Crude Oil has been choppy recently.
Crude Oil (WTI) 88.62 -0.47 (-0.53%)
The Crude Oil Bears still have the slight overall near-term technical advantage.
The London PM Gold fixing is 1,697.75 Vs the previous London PM fixing at 1,720.00.
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.
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