Gold and silver prices experienced a sharp decline in midday U.S. trading on Wednesday, driven by profit-taking in the futures markets and influenced by bearish external factors. December gold futures dropped by $19.20, settling at $2,533.40, while September silver futures fell by $0.84, closing at $29.13.
The key factors contributing to this downturn include a significant rebound in the U.S. dollar index, which surged after hitting an eight-month low earlier this week, and declining crude oil prices, which hovered around $74.75 per barrel. Additionally, improved risk appetite among traders and investors this week has negatively impacted the appeal of safe-haven assets like gold and silver.
Geopolitical tensions in the Middle East, particularly between Israel and Hezbollah, have not escalated as much as anticipated, further dampening demand for precious metals. Iran’s lack of retaliation following the assassination of its proxy officials by Israel has also eased market concerns. Some analysts believe Iran is avoiding direct conflict with Israel to prevent an attack on its nuclear facilities, which are believed to be aimed at developing nuclear weapons.
U.S. stock indexes were lower at midday, undergoing corrective pullbacks after recovering from their August lows. The market’s focus is now on Nvidia’s earnings report, due later today, which could have significant implications for stock market sentiment.
Technically, December gold bulls still hold a strong near-term advantage, with a Wyckoff Market Rating of 8.0. However, today’s session saw a bearish “outside day” on the daily bar chart, indicating potential downside risks. The next upside target for gold bulls is closing above $2,600.00, while bears are eyeing a drop below $2,475.00. Initial resistance is observed at $2,550.00, followed by the overnight high of $2,564.30, with support at today’s low of $2,527.80 and then at $2,506.40.
For September silver futures, bulls maintain a near-term advantage, reflected in a Wyckoff Market Rating of 6.0. The primary goal for silver bulls is to close above solid resistance at $31.00, while bears aim to push prices below the $28.00 support level. Resistance is first seen at $29.50 and then at $30.00, with support at $29.00 and last week’s low of $28.795.
