Gold Drops To 4-Wk. Low Amid Surging U.S. Dollar

(Kitco News) - Gold prices aremodestly down and hit a four-week low in early U.S. trading Monday, pressuredby a very strong U.S. dollar on the foreign exchange market. Silver prices arealso slightly down and hovering near a two-month low. December gold futures were last down $2.70 an ounce at $1,205.90. December Comex silver was last down$0.05 at $14.09 an ounce.

Globalstock markets were mixed overnight, with European shares mostly weaker andAsian shares mostly firmer. U.S. stock indexes are pointed toward narrowlymixed openings when the New York day session begins.

China’sstock market did post a modest rebound Monday as Alibaba’s “singles day” salesaw Chinese consumers buy $30.8 billion in goods on-line Sunday. That beat lastyear’s 24-hour total of $25.3 billion.

TheU.S. government is closed today for the Veterans Day holiday.

Thekey “outside markets” today find the U.S. dollar index solidly higher andhitting a 16-month high overnight. The Euro currency hit a 16-month low againstthe greenback.

Meantime,Nymex crude oil futures prices are firmer and trading around $60.50 a barrelafter hitting a seven-month low on Friday. Reports today say Saudi Arabia willcut its oil exports and prod the OPEC oil cartel to lower its collective crudeoil production, in the wake of the recent steep downdraft in oil prices.

Thereis no major U.S. economic data due for release Monday, due in part to thefederal holiday.

Technically,gold bears have the overall near-term technical advantage. Bulls’ next upsideprice objective is to produce a close in December futures above solidresistance at the October high of $1,246.00. Bears' next near-term downsideprice breakout objective is pushing prices below solid technical support at $1,200.00.First resistance is seen at the overnight high of $1,212.00 and then at $1,220.00.First support is seen at $1,200.00 and then at $1,190.00. Wyckoff's MarketRating: 3.0

Decembersilver futures bears have the solid overall near-term technical advantage.Silver bulls' next upside price breakout objective is closing prices abovesolid technical resistance at $15.00 an ounce. The next downside price breakoutobjective for the bears is closing prices below solid support at the Septemberlow of $13.965. First resistance is seen at Friday’s high of $14.425 and thenat last week’s high of $14.775. Next support is seen at the September low of $13.96and then at $13.75. Wyckoff's Market Rating: 2.0.

By Jim Wyckoff

For Kitco News

Follow @jimwyckoffjwyckoff@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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