Comex gold prices are trading slightly higher Wednesday morning, on a minor corrective, short-covering bounce following strong losses posted on Tuesday that did produce some fresh technical damage. A steady-higher U.S. dollar index is once again limiting buying interest in gold Wednesday morning. December Comex gold last traded up $3.00 at $1,341.30 an ounce. Spot gold last traded up $0.90 at $1,341.00.
Many commodity futures markets are under modest selling pressure again Wednesday morning, following stronger losses posted Tuesday, in the wake of rumors that surfaced early Tuesday regarding Chinese monetary officials becoming more aggressive in tightening monetary policy, including possible restraints on trader speculation in commodity markets. Chinese economic officials are worried about rising inflationary pressures. This situation has also led to selling pressure in the precious metals.
The U.S. dollar index is trading steady to firmer Wednesday morning. The index hit a fresh six-week high Tuesday. Part of the greenback's strength is coming from a weaker Euro currency amid fresh concerns regarding Ireland's sovereign debt. The U.S. dollar index bulls have gained some fresh upside technical momentum recently to suggest a near-term market low is in place. The recent rebound in the U.S. dollar index has also been a bearish weight on precious metals prices.
In overnight news, the World Gold Council reported global demand for gold increased by 12%, in the third quarter, versus the same period last year. However, the WGC said world gold demand did decline in the third quarter versus the second quarter of this year.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, housing starts and building permits, and the weekly liquid energy stocks report.
The London A.M. gold fixing was $1,336.50 versus the previous London P.M. fixing of $1,349.00.
Technically, December gold futures saw significant near-term chart damage occur with Tuesday's strong downside price pressure. Bulls need to show fresh power yet this week to avoid more serious near-term chart damage.
Gold bulls' next near-term upside technical objective is to produce a close above technical resistance at the October high of $1,388.10. Bears' next near-term downside price objective is closing prices below solid technical support at $1,315.60. First resistance is seen at $1,350.00 and then at $1,360.00. Support is seen at Tuesday's low of $1,329.00 and then at the November low of $1,325.50. Today's near-term Fibonacci support/resistance level: $1,357.00.
December silver futures last traded up 22.7 cents at $25.46 an ounce. While silver bulls do still have the overall near-term technical advantage at present, they have faded and need to show fresh power soon, in order to prevent serious near-term technical damage from occurring. The important longer-term technical posture of silver remains bullish.
The next downside near-term price objective for the bears is closing prices below solid technical support at $24.00. Bulls' next upside price objective is producing a close above solid technical resistance at $27.00 an ounce. First resistance is seen at Tuesday's high of $25.85 and then at $26.00. Next support is seen at Tuesday's low of $24.98 and then at $24.50. Today's near-term Fibonacci support/resistance level: $25.29.
