(Kitco News) - Gold prices are modestly lower in early U.S. trading Wednesday. The safe-haven metal on this day loses favor in the investment community amid a “risk-on” day in the market place, as world stock markets are in rally mode so far this week. December Comex gold was last down $2.10 at $1,118.90 an ounce. December Comex silver was last down $0.07 at $14.685 an ounce.

China’s Shanghai stock index closed up 2.3% Wednesday after the Chinese government announced late Tuesday it would implement further measures to stimulate its flagging economy. Japan’s Nikkei stock index was up 7.7% on the day—the biggest daily percentage gain since 2008. European stock markets were also higher Wednesday. U.S. stock indexes were again pointing to sharply higher opens. Look for more volatile trading this week, following the recent market turbulence. Surging stock markets worldwide pull investor interest away from safe-haven gold.

The key “outside markets” are also bearish for the precious metals early Wednesday. Nymex crude oil futures are lower. There are still technical clues crude oil has put in a near-term market bottom. But the crude oil bulls need to step up and show fresh power very soon to keep those clues relevant. The other outside market on Wednesday finds the U.S. dollar index higher. Trading in the USDX has been choppy recently.

Focus of the marketplace is looking ahead to next week’s Federal Open Market Committee (FOMC) meeting. There is no clear consensus among traders and investors whether the Fed will make an interest rate hike at next week’s meeting, or wait until December, or later.

U.S. economic data due for release Wednesday includes the jobs turnover and labor report, the weekly MBA mortgage applications survey, and the weekly Johnson Redbook and Goldman Sachs retail sales reports.

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Wyckoff’s Daily Risk Rating: 2.5 (Trader and investor market risk appetite is keener early Wednesday.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 5, with 1 being least risk-averse (most risk-on) and 5 being the most risk-averse (risk-off).

The London A.M. gold fix is $1,122.30 versus the previous P.M. fix of $1,121.15.

Technically, December gold futures bears have the firm near-term technical advantage. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,147.30. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,100.00. First resistance is seen at $1,125.00 and then at $1,133.10. First support is seen at Tuesday’s low of $1,114.70 and then at $1,110.00. Wyckoff’s Market Rating: 2.5

December silver futures bears have the solid near-term technical advantage. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $15.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $13.50. First resistance is seen at last week’s high of $14.95 and then at $15.00. Next support is seen at Tuesday’s low of $14.44 and then at last week’s low of $14.39. Wyckoff's Market Rating: 2.0.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff

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