Gold prices ended the U.S. day session solidly lower, hit a nine-month low and fell below key chart support at $1,200.00 Wednesday. A higher U.S. dollar index today was a major bearish outside market force working against the precious metals market bulls. The dollar index surged to a 13-year high today. The bearish near-term technical postures for gold and silver markets also invited more chart-based selling. Sell stop orders were triggered in the Comex gold futures market when prices breached the key $1,200.00 level. December Comex gold was last down $23.50 an ounce at $1,187.70. December Comex silver was last down $0.262 at $16.37 an ounce.
Gold futures fell below $1,200 an ounce for the first time since February as the Federal Reserve prepares to hike interest rates, U.S. stocks notch up records and Donald Trump gets ready to take office.
The exodus has unfolded as gold prices head for a second monthly decline on expectations President-elect Trump will bolster spending, helping push the odds for a rate increase next month to 100 percent and boosting the dollar. Minutes of the Fed’s November meeting due later Wednesday are likely to confirm officials were moving closer to raising borrowing costs before the election, and developments since have served only to bolster the case for tightening. Major U.S. stock benchmarks rallied to records on Tuesday.
As the U.S. markets opened for business Wednesday morning, many traders and market watchers were sipping their coffee and taking it easy, reckoning another historically quiet Wednesday trading session leading up to Thursday's U.S. Thanksgiving holiday. However, the release of a much-stronger-than-expected U.S. durable goods orders report rattled many markets, including gold, currencies, and bond markets.
The Federal Reserve’s FOMC minutes were released Thursday afternoon. The minutes contained an upbeat assessment of the U.S. economy, but the marketplace saw that as nothing new. Most market watchers were already expecting the Fed to raise U.S. interest rates in December.
"It has been a pretty dreadful time for gold. Everything that's good for growth has been negative for gold," said Robin Bhar, head of metals research at Societe Generale in London.
Reference: KITCO, Reuters, Bloomberg
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