Despite weakness in the equity markets and subsequent pullback in the dollar this week, gold and silver have only seen modest gains for the first three sessions for the week. December gold futures pushed higher to new monthly highs for November albeit briefly overnight as gold traded 1290 for an instant.Silver up 10 cents for the week so far, has seen gains up to 17.20 per ounce but remains stubbornly between the recent range. (16.75-17.25). Silver settled today at 16.97. For the week gold is up a whopping $3.50. I’m getting the feeling that the bulls may be getting a little uneasy here as Dollar weakness and dovish Fed commentary on eliminating a possible December rate hike were in the news cycle to start the week. Economic data has been mixed with today’s results as follows.The consumer price index (CPI) and retail sales were the U.S. data highlights today. CPI in October came in at up 0.1% from September, which is right in line with forecasts. Retail sales in October were up 0.2% from September versus the forecast of up 0.1%. Physical gold demand news continues to be mixed as well. The China gold association reported yesterday that China produced 313 tonnes of gold during the first three quarters of 2017, a decline of 9.0 percent for the same period in 2016. At the same time consumption was 815 tons, up 15.4 percent. Despite bearish chatter form fed officials the market is pricing in a December rate hike. Its most likely a done deal. All eyes are on the proposed tax cuts and what that means for corporate America. Its hard to decipher on how close a deal maybe and what it will mean but the uncertainty has some longs in equities taking profits. However the reinvestment into safer havens like gold has not occurred. Seasonally in my view mid November up until the Christmas holidays have been weak for physical purchases and therefore price in my opinion. However further setbacks in stocks would push investment into gold and silver.
For direction for and price projection here are some levels to watch. Trend line resistance for gold comes in this week at 1288.7. A close above and the market quickly trades to the 50 day moving average at 1292.6. A close above there and 1308 is my near term target to the upside. Support is down first at 1273.9. A close under and 1262.7 is next. A close under at 1262.7 and we could see a free fall to 1243. For Dec silver, trend line support in silver is at 16.88 and 16.82. A close under 16.82 and 16.67 is next. A close under this level and 16.34 is next. Resistance is up at 17.17 the 200 day. A close above and we can push up to 17.30 and then 17.50.
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