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Gold Down on Technical Selling, Firmer U.S. Dollar

Gold prices registered moderate drops in early trading on Friday, pressured by a firmer U.S. dollar index and new technical selling. With price levels Friday morning, gold and silver markets are prepared to close with technically bearish weekly lows, according to analysis with Forbes.

December gold traded lower $8.90 per troy ounce to $1,735.80 with the spot price of gold down $7.30 to $1,735.00. Comex silver for December delivery is also down $0.418 to $32.45 per troy ounce.

The two-day European Union leaders’ summit in Brussels concluded on Friday with markets reacted little to new pronouncements that included efforts to better coordinate the EU banking bloc. Spain continues to stall on formally requesting a bailout from the EU, with the Spanish prime minister saying he has made no decision on the matter at the conclusion of the summit. The dropping rates on Spanish bond yields at auction this week amid good strong demand indicate Spanish officials may not be in a hurry to seek financial assistance, a logjam that has been plaguing precious metals markets for weeks.

The U.S. dollar index traded higher on Friday morning as short covering predominated in a bear market. U.S. dollar bears retain overall near-term technical advantage, as crude oil prices are slightly higher in early Friday trading, making up the key outside markets that give indication for the precious metals markets.

The London A.M. gold fixing is $1,732.75 against the previous P.M. fixing at $1,743.00.

On a technical basis, gold futures bulls retain the overall near-term technical advantage, according to analysis from Forbes, but they need to show fresh power in order to avoid near-term chart damage. Prices are ready to close in technically bearish territory at a weekly low on Friday. The next price breakout level is a close above solid technical resistance at $1,760.00 per troy ounce. Solid technical support is present at $1,720.00 per troy ounce.

Silver futures for December delivery reached a new six-week low in overnight trading as prices were also ready to close in technically bearish territory for the week on Friday. For silver bulls, the next upside price breakout objective is a close above technical resistance at $33.50 per troy ounce.

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