Thoughts of an upside breakout in gold this week with silver in tow where dashed mid morning today. For the week the yellow metal posted slight gains of just $5.00 to finish the week at 1274.2. Silver posted a minimal gain of .04 cents to close at 16.87. While both markets finished the week higher Friday, upward momentum was slashed due to the market being hit with a major sell order as more than four million ounces of gold were sold within a 15-minute period. That equates to 40 K contracts which is usually over ten percent of the daily volume. The sell order knocked gold futures prices $10.00 lower and the market never recovered later in the session. Silver dropped to just above unchanged for the week following gold lower from just above 17.00 to 16.85. The large sell order could be many things but in my view was a liquidation or exit from a previously held position. In the end gold continues to remain near term range bound between 1265.0 and 1285. Silvers range sits between 16.70 and 17.25. While the Dollar and equity markets exhibited some weakness here this week, it wasn’t nearly enough to promote any significant safe haven buying. Gold finished the week between the 200 day moving average at 1263.8 and the 100 day at 1279.8. Heading into next week the U.S. economic calendar fills up with the highlight being October’s U.S. Consumer Price Index. Core annual inflation has been stuck at the bottom of its range for five months, creating some worries among U.S. central bankers. If price pressures don’t pick up, it could lead to doubts over how aggressive the Federal Reserve will be in raising interest rates in 2018. Aside from inflation data, markets will receive regional manufacturing data as well as housing construction numbers.
Technical levels for next week come in as follows. For December gold, support is down first at 1263.9. A close below and 1251.6 is next. Resistance is at 1287.0 A close over and 1299.8 is next. For December silver first support is down at 1668. A close under and 1649 is next. Resistance is up at 17.16 and then up at 17.46.
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