Steady to slightly higher gold prices concluded the day for the U.S. session Thursday. With nimble bargain hunting in the cash market, short covering by short-term futures traders seemed to highlight the day’s events along with crude oil’s drop in pricing. Oil hit a three-year low in Nymex futures while hitting a four-year low in Brent futures. Consequently, gold and silver buying interest slumped in the process. December Comex gold was up $2.20 at $1,161.30 an ounce while Spot gold went down $0.40 at $1,161.75. December Comex silver’s final up trade was $0.007 at $15.63 an ounce.
As reported by the World Gold Council, the global demand for gold has dropped 2% since this time last year. In the third quarter, Chinese demand for gold jewelry experienced a sharp drop while India’s had a sharp rise. When looking back at previous market trends, history shows the slumping gold is usually followed by a value-buying stint right before the boom-cycle repeats itself.
China’s industrial production for October slumped from the expected 8% rise to 7.7% year-on-year. This could explain the drop in Chinese buying interest with gold. That being said, China’s economic readings are still far ahead of the global industrial pack, despite their recent deceleration.
Be greedy when others are fearful and be fearful when others are greedy. ─ Warren Buffet
A survey shown by a European Central Bank forecasts the European Union’s overall inflation rate at 0.5% with further data reporting 1.0% in 2015, and 1.4% in 2016. All of these figures are still far below the expected 2.0% rate the ECB had projected. The London P.M. fix for gold was at $1.161.75 as opposed to the A.M. fix at $1,161.00.
December gold futures closed prices around mid-range today. Gold bears still have the firm near-term technical advantage overall. The pennant pattern forming on the daily bar chart is bearish. The gold bulls’ next upside near-term price breakout goal is a close above solid technical resistance at last week’s $1,179.00 high. Bears’ next near-term downside breakout price goal is closing prices below solid technical support of last week’s $1,130.40 low. Thursday’s high of $1,167.40 is projected as the first resistance, followed by $1,172.50. Thursday’s low of $1,153.00 is expected to be the first support, followed by $1,150.00. Wyckloff’s Market Rating: 2.0.
