Gold Sees Downside Correction From Recent Gains....

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Gold prices ended the U.S. day session modestly lower Wednesday, on a downside technical correction following gains scored Monday and Tuesday.  February gold was last down $3.90 at $1,257.20 an ounce. Spot gold was last quoted down $4.20 at $1258.25. March Comex silver last traded up $0.045 at $20.36 an ounce.

The market place showed little reaction Wednesday to a surprise move late Tuesday by U.S. government lawmakers to reach a bipartisan agreement on a budget deal that should avoid the debacle that occurred just a few months ago, which forced the U.S. government to shut down for two weeks. This one more unstable element taken away from a market place that has already been remarkably void of market-sensitive geopolitical uncertainty for weeks. Safe-haven gold usually benefits from geopolitical uncertainty and the trader anxiety that goes with it. Part of the reason gold has seen rough sailing the past few months is a lack of safe-haven demand.

In overnight news, reports said China’s banks increased their lending in November, which is a signal Chinese monetary officials want to continue to stimulate their economy even though the added liquidity in the financial system could be inflationary.

Traders and investors are looking forward to next week’s meeting (Dec. 17-18) of the U.S. Federal Reserve’s Open Market Committee (FOMC). Recent upbeat U.S. economic data, including a stronger-than-expected U.S. jobs report last Friday, suggest the Fed might move up its timeline for implementing a tapering of its monthly bond-buying program, also called quantitative easing, including a growing number who think the Fed will announce a tapering at next week’s FOMC meeting. The intense speculation on the precise timing of Fed tapering has done two things to the market place: It has numbed traders and investors to the actual event, which is likely to lessen its significance when it does actually occur. And the markets have already mostly factored into their price structures the Fed tapering, when it does occur.

The London P.M. gold fix is $1,260.75 versus the previous P.M. fixing of $1,266.25.
Technically, February gold futures prices closed near mid-range Wednesday and saw a corrective pullback from this week’s decent gains. While the gold market bears are in overall technical control, the bulls are making a move as the bears appear to be exhausted. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at last week’s low of $1,210.10. First resistance is seen at this week’s high of $1,267.50 and then at $1,275.00. First support is seen at $1,250.00 and then at this week’s low of $1,237.40.

March silver futures prices closed near mid-range Wednesday and hit a fresh three-week high on mild short covering. Silver bears still have the overall near-term technical advantage. However, the bulls are making a move. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $21.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at last week’s low of $18.89. First resistance is seen at Wednesday’s high of $20.48 and then at $20.60. Next support is seen at Wednesday’s low of $20.21 and then at $20.00.


March copper closed up 265 points at 329.30 cents Wednesday. Prices closed near the session high and hit a fresh five-week high. Bulls have the near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 336.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 320.00 cents. First resistance is seen at 330.00 cents and then at 331.00 cents. First support is seen at 326.85 cents and then at 325.00 cents.

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