Gold, Silver Prices Near Steady After Hitting 6-Wk Lows Overnight
(Kitco News) - Gold prices are hovering near unchanged levels in early U.S. trading Thursday, after dropping to a six-week low in overseas trading. Silver prices also fell to a six-week low today. Many markets are pausing today, awaiting direction from new fundamental developments. December Comex gold was last down $0.20 an ounce at $1,287.60. December Comex silver prices were last up $0.003 at $16.835 an ounce.
Better risk appetite in the marketplace this week, as well as a rallying U.S. dollar index, have been bearish for the gold and silver markets.
World stock markets were mostly firmer overnight, on hopes that a U.S. corporate tax-reform plan will boost economic growth. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins.
World bond market yields are on the rise this week, on ideas that better world economic growth will prompt the major central banks to become less accommodative on their monetary policies. Odds are rising (now about 75%) that the Federal Reserve will raise U.S. interest rates in December.
In overnight news, the Euro zone economic sentiment indicator rose to 113.0 in September from 111.9 in August. The September reading was the highest in over 10 years. This report falls into the camp of the Euro zone monetary policy hawks. European Central Bank President Mario Draghi said Thursday the ECB will decide later this year specifically when to start winding down its quantitative easing of monetary policy (bond buying).
The U.S. dollar index is slightly lower but hit another five-week high overnight. A bullish head-and-shoulders bottom reversal pattern has formed on the daily bar chart for the USDX, which is a technical clue that a market bottom is in place. Meantime, the Euro currency hit another five-week low against the U.S. dollar overnight. There are chart clues the Euro has put in a near-term market top.
The other key outside market on Thursday morning sees Nymex crude oil futures higher and hit a five-month high overnight. The oil bulls have the firm near-term technical advantage and still have upside momentum. However, there are stiff chart resistance levels just overhead in the crude oil market.
U.S. economic data due for release Thursday includes the weekly jobless claims report, advance economic indicators, the second-quarter GDP report, third estimate, and the Kansas City Fed manufacturing survey.
Technically, December gold futures bears have the slight 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 $1,320.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,270.00. First resistance is seen at 1,291.20 and then at $1,300.00. First support is seen at the overnight low of $1,280.40 and then at $1,275.00. Wyckoff’s Market Rating: 4.5
December silver bears also have the slight 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 this week’s high of $17.675 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 $17.00 and then at this week’s high of $17.295. Next support is seen at the overnight low of $16.705 and then at $16.645. Wyckoff's Market Rating: 4.5.