More solid losses for gold as bears gain more confidence

NEW YORK (November 12) Gold prices are solidly down and silver prices near steady in midday U.S. trading Tuesday. Both markets hit seven-week lows today. The two precious metals are in a downdraft amid a very strong U.S. dollar, rising U.S. Treasury yields, less demand for metals from China and less risk aversion in the general marketplace at present. December gold was last down $17.20 at $2,600.30 and December silver was up $0.022 at $30.645.

Importantly, the psychology of the precious metals marketplace has changed the past week. It appears that most gold and silver traders/investors have moved from confidently buying price dips to now nervously selling any price strength. The main reasons for this change in psychology are the deteriorating near-term technical postures for gold and silver, and the return of better risk appetite to the general marketplace. Until this trader psychology changes, it appears the path of least resistance for gold and silver prices will remain sideways to lower.

The key outside markets today see the U.S. dollar index higher again and at a 4.5-month high. Nymex crude oil futures prices are a bit firmer and trading around $68.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.5%.

The U.S. data points of the week are the consumer price index on Wednesday and the producer price index on Thursday. CPI for October is seen up 2.6%, year-on-year, compared to a reading of up 2.4% in the September report.

KitcoNews