Metals on Thursday settled mixed with Sep silver at a 1-week low and Sep copper at a new 2-3/4 nearest futures high: Dec gold -2.7 (-0.21%), Sep silver -0.083 (-0.49%), and Sep copper +0.0535 (+1.79%). Bearish factors included (1) a stronger dollar, and (2) long liquidation in precious metals ahead of Fed Chair Yellen’s speech Friday in Jackson Hole, WY. Copper rallied as signs of tighter supplies fueled fund by buying after LME copper inventories fell -4,475 MT to 245,050 MT, a 1-3/4 month low.

While the silver and gold bull camp could expect to be disappointed by lack of strength in gold this week as the fear of US government shutdown looms over us, the December gold contract has actually seen its consolidation pattern tighten and prices would appear to be coiling and poised for a distinct directional move higher today. In retrospect, US scheduled data remains mixed which would seem to reduce the prospect of definitively hawkish dialogue from the US Fed at the Jackson Hole Wyoming symposium today.

MARKET IDEAS: As previously indicated, the coiling action in gold and silver markets seems to beg for a definitive price reaction today. While the December gold charts remain bullish from a classic chart perspective, the September silver chart on the other hand is showing some breakdown in the coiling pattern with a temporary decline to the lowest price level since August 16. Uptrend channel support in December gold is seen at $1,285.50 and a move above the $1,300 level is probably a necessary target for the bull camp to maintain control. Uptrend channel support in September silver today is seen at $1676 and a potential necessary upside targeting for the bull camp is seen up at $17.11.

Dec ’17 Gold Daily Chart

Dec '17 Gold Daily Chart

Manon Lasserre