Gold Slightly Up; Bears May Finally Be Exhausted
(Kitco News) - Gold and silver prices are holding slight gains in early U.S. trading Thursday, on correctives rebounds after gold hit a nearly 1.5-year low overnight and silver scored a two-year low. Strong appreciation in the U.S. dollar along with dropping crude oil prices have been major bearish elements punishing the precious metals markets recently. December gold futures were last up $2.20 an ounce at $1,187.20. September Comex silver was last up $0.166 at $14.615 an ounce.
There is a ray of hope for the gold and silver market bulls Thursday morning. Prices at the start of U.S. trading were trading well off their new for-the-move lows and near their session highs. If gold and silver prices can finish the day near their daily highs, such would suggest the bears have run out of gas and that near-term market bottoms are in place. Thus, Thursday is an extra important trading day for the metals—especially for the bulls.
Global stock markets were mixed overnight, with European shares mostly up and Asian shares mostly down. U.S. stock indexes are pointed toward higher openings when the New York day session begins.
There is less risk aversion in the world marketplace today, partly on news the U.S. and China are set to hold trade talks later this month—the first negotiations in two months. However, the threat of an emerging markets economic and currency crisis is still on the minds of many traders and investors, and this matter will not just disappear. The Turkish lira, which has garnered the most scrutiny in recent weeks, is trading higher versus the U.S. dollar today.
The precious metals markets were hit especially hard Wednesday, on worries about a global economic slowdown that could be caused by a secondary currency crisis. Supposedly safe-haven gold and silver markets have not seen any significant demand surface due to the potential for a currency market contagion.
The key outside markets today find Nymex crude oil prices lower and trading just around $65.00 a barrel. Oil prices hit a seven-week low overnight and are trending lower. Meantime, the U.S. dollar index is slightly lower on a corrective pullback after hitting a 14-month high on Wednesday.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey and new residential construction.
Technically, gold bears have the solid overall near-term technical advantage amid a price downtrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close in December futures above solid resistance at $1,226.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,150.00. First resistance is seen at $1,200.00 and then at Tuesday’s high of $1,205.80. First support is seen at $1,180.00 and then at today’s low of $1,167.10. Wyckoff's Market Rating: 1.0
September silver futures bears have the solid overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $15.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.00. First resistance is seen at $15.00 and then at Tuesday’s high of $15.105. Next support is seen at today’s low of $14.315 and then at $14.25. Wyckoff's Market Rating: 1.0.