US Gold prices finished pit trade lower Tuesday. Bearish outside markets limited buying interest in the Gold and Silver markets, as the USD index was firmer, while Crude Oil prices were weaker.

Gold and Silver have seen some mild profit taking and chart consolidation occur early this week, following last week’s good gains.

Dec Gold last traded – 6.60 at 1,724.30 oz.

Spot Gold was last quoted – 4.30 at 1,725.00 oz.

Dec Comex Silver last traded – 0.082 at 32.44 oz.

The continuing EU sovereign debt crisis has heated up again, which has put a “wet towel” on many raw commodity markets recently. That has spilled over into some selling pressure in Gold and Silver markets early this week.

Overnight, European stocks declined on some disagreement among European Union “Troika” officials on the terms and when to disburse the next tranche of EU bailout money to Greece, which is now running out of cash. A a meeting Monday they failed to come to agreement on when to give Greece a new cash infusion, and pushed it to 20 November.

There was also more weak economic data coming from Germany Tuesday, where the ZEW index of economic sentiment fell sharply. There is Key economic data coming out of the EU Thursday, as GDP data is released by the major EU countries.

The focus in the US remains on resolving the Fiscal Cliff matter by the end of the year. Ratings agencies have issued warnings to the US that its credit will be downgraded if the problem is not timely resolved. Expect the sides to come to agreement before the end of the year by agreeing to short-term funding measures and then agreeing to visit the situation later down the line in 6 months or so.

The USD index traded to a 2 month high. The USD Bulls have good near-term technical Bullish momentum, but the resistance is strong at this level IMO.

Nymex Crude Oil prices traded weaker Tuesday. The Crude Oil Bears have the overall near-term technical advantage as a 2 month-old downtrend is in place on the daily chart.

Crude Oil (WTI) 85.36 -0.21 (-0.25%)

This week is the festival of Diwali in India, in which Gold buying is a tradition, and new physical demand for Gold coming out of India will be the focus in the near term.

The London PM Gold fixing was 1,726.25 Vs the prior PM fixing at 1,735.25.


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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