Thursday, August 21, 2014

Gold, Silver Hammered On Strong Dollar, Hawkish Fed

NYMEX gold $1276.5, down $15.90 after trading as low as $1275.50. Silver $19.40 off 9.7 cents, low $19.285.
From Kitco:

A.M. Kitco Metals Roundup: Gold Solidly Lower, Hits 2-Month Low, on Hawkish FOMC, Strong U.S. Dollar
Gold prices are sharply lower and hit a two-month low in early U.S. dealings Thursday.

The metal is seeing selling pressure in the wake of hawkish minutes from the latest meeting of the Federal Reserve’s Open Market Committee (FOMC) and by a rallying U.S. dollar index that hit an 11-month high overnight. December Comex gold was last down $18.70 at $1,276.50 an ounce. Spot gold was last quoted down $16.00 at $1,276.00. December Comex silver last traded down $0.147 at $19.415 an ounce.

The market place is still digesting Wednesday afternoon’s FOMC report. The Fed officials’ wording that the U.S. labor situation continues to improve fell into the camp of monetary policy hawks, as it hinted the U.S. central bank could move to raise interest rates a bit sooner than many had expected. The FOMC minutes pressured U.S. Treasury and gold prices, but the U.S. stock indexes ignored the data as the Nasdaq index set a 14-year high Wednesday, while the S&P 500 futures hit a record high. The better investor/trader risk appetite in the market place this week is also a bearish factor for the safe-haven gold market.

Focus now turns to the annual Kansas City Federal Reserve meeting in Jackson Hole, Wyoming, that begins on Thursday. The confab of world central bankers has in the past yielded important U.S. monetary policy speeches and clues to the direction of monetary policy. Fed Chair Janet Yellen and ECB President Mario Draghi are scheduled to speak on Friday in Jackson Hole.

In overnight news, the HSBC China preliminary manufacturing purchasing managers index (PMI) fell to 50.3 in August versus 51.7 in July. The August reading was a three-month low for the figure, and the market place deemed the report downbeat. The China data is an underlying bearish factor for the raw commodity sector. China is the world’s largest importer of raw commodities....MORE
...Technically, gold bears have regained the near-term technical advantage and have re-established a six-week-old downtrend on the daily bar chart. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at the June low of $1,241.70. First resistance is seen at $1,281.00 and then at today’s high of $1,292.00. First support is seen at today’s low of $1,274.40 and then at $1,270.00....  
"...Gold Weakens in Wake of Hawkish FOMC Minutes"
Gold: Why Can’t It Break Out?
Sell Silver
Lines on Charts: Silver Is Poised To Break Lower

Also at Kitco:
Pressure Likely To Stay On Precious Metals As Jackson Hole Conference Begins – MKS