Gold, Silver Prices See Corrective Bounces
(Kitco News) - Gold and silver prices are firmer in early U.S. trading Wednesday, on some short covering in the futures markets and perceived value-buying in the cash markets, following recent selling pressure that drove both markets to seven-week lows earlier this week. A weaker U.S. dollar index on this day is also a supportive outside market element working in favor of the precious metals bulls. December Comex gold was last up $6.60 an ounce at $1,281.30. December Comex silver prices were last up $0.155 at $16.805 an ounce.
The U.S. ADP national employment report for September was just released and showed a gain of 135,000 jobs. This was below the median forecast for a rise of 150,000. The precious metals markets did not show significant reactions to the news.
Fed Chair Janet Yellen gives a speech Wednesday afternoon. Any comments she makes on the U.S. economy will be closely scrutinized for clues on the timing of future monetary policy moves by the Federal Reserve.
Traders and investors are looking ahead to Friday’s U.S. employment report for September from the Labor Department. The key non-farm payrolls number is expected to come in at up only 80,000, according to a Dow Jones Newswires survey. The unusually low non-farm jobs growth estimate is due to two major hurricanes that hit the U.S. mainland in September.
The U.S. dollar index is lower in early U.S. trading, on a corrective pullback after hitting a six-week high on Tuesday.
The other key outside market on Wednesday morning sees Nymex crude oil futures weaker. While the oil bulls still have the slight overall near-term technical advantage, there are stiff chart resistance layers above the market.
Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the U.S. services PMI, the ISM non-manufacturing index, the global services PMI, and the weekly DOE liquid energy stocks report.
Technically, December gold futures bears have the overall near-term technical advantage. Prices are in a three-week-old downtrend on the daily bar chart. Bulls’ next upside technical objective is pushing and closing prices above chart resistance at $1,300.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,250.00. First resistance is seen at the overnight high of 1,285.00 and then at $1,293.20. First support is seen at this week’s low of $1,271.00 and then at $1,265.00. Wyckoff’s Market Rating: 4.0
December silver bears also have the overall near-term technical advantage. Prices have been trending lower for three weeks. The next upside price breakout objective is closing futures prices above solid technical resistance at last week’s high of $17.295 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at the overnight high of $16.92 and then at $17.00. Next support is seen at this week’s low of $16.565 and then at $16.50. Wyckoff's Market Rating: 4.0.