Gold down on technical selling ahead of U.S. CPI

- Gold prices are moderately down and hit a three-week low in midday U.S. trading Tuesday. Chart-based selling was featured amid bearish technicals. Metals traders are anxiously awaiting a U.S. inflation report on Wednesday morning. December gold was last down $9.90 at $1,937.50 and December silver was down $0.002 at $23.38.

Traders and investors are waiting for the U.S. consumer price index report for August, due out Wednesday morning. The CPI is expected to be up 4.3%, year-on-year, versus a 4.7% rise in the July report. Look for more active trading in many markets in the immediate aftermath of the CPI report—especially if it’s a miss from market expectations.

The European Central Bank also holds its regular monetary policy meeting Thursday and is expected to slightly raise its main interest rate by 0.25 percent. Technically, December gold futures prices hit a three-week low today. Bears have the firm overall near-term technical advantage. A four-month-old downtrend on the daily bar chart has been restarted. Bulls’ next upside price objective is to produce a close above solid resistance at the September high of $1,980.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the August low of $1,913.60.

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