Strong U.S. Dollar Continues Strangle-Hold On Gold, Silver

(Kitco News) - Gold and silver prices downand hit new for-the-move lows in early U.S. trading-gold a nearly 1.5-year lowand silver a two-year low. A powerful rally in the U.S. dollar index remainsthe major bearish element punishing the precious metals markets. The USDX hit a14-month high overnight. December gold futures were last down $7.00 an ounce at$1,193.70. September Comex silver was last down $0.233 at $14.82 an ounce.

Globalstock markets were mixed overnight. U.S. stock indexes are also pointed towardweaker openings when the New York day session begins.

U.S.-Turkeyrelations have further deteriorated as Turkey has slapped economic sanctions onthe U.S. The Turkish lira has stabilized at mid-week, but other secondarycurrencies are still wobbly and traders/investors worldwide are still jitterythat a secondary currency contagion could develop as the U.S. dollar continuesto appreciate against most world currencies. Gold and silver bulls remainstymied their safe-haven metals can't get a bid due to the risk aversion in theworld marketplace at present.

Theeconomic highlight of the day for the U.S. is retail sales data for July, whichis expected to come in at up just 0.1%.

Theother key outside market today finds Nymex crude oil prices lower and tradingjust above $66.00 a barrel. Oil prices are near this week's six-week low andare trending lower.

U.S.economic data due for release Wednesday includes the weekly MBA mortgageapplications survey, retail sales, industrial production and capacityutilization, preliminary productivity and costs, the Empire State manufacturingsurvey, manufacturing and trade inventories, the NAHB housing market index,Treasury international capital data, and the weekly DOE liquid energy stocksreport.

Technically,gold bears have the solid overall near-term technical advantage amid a pricedowntrend on the daily bar chart. Gold bulls' next upside near-term pricebreakout objective is to produce a close in December futures above solidresistance at $1,226.00. Bears' next near-term downside price breakoutobjective is pushing prices below solid technical support at $1,150.00. First resistanceis seen at $1,200.00 and then at Tuesday's high of $1,205.80. First support is seenat today's low of $1,190.50 and then at $1,185.00. Wyckoff's Market Rating: 1.0

Septembersilver futures bears have the solid overall near-term technical advantage.Silver bulls' next upside price breakout objective is closing prices abovesolid technical resistance at $15.50 an ounce. The next downside price breakoutobjective for the bears is closing prices below solid support at $14.50. Firstresistance is seen at $15.00 and then at Tuesday's high of $15.105. Nextsupport is seen at today's low of $14.765 and then at $14.50. Wyckoff's MarketRating: 1.0.

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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