Gold, Silver Prices Rebound As U.S. Dollar Index Backs Off
Editor's Note: The article was updated to reflect a change in prices.
(Kitco News) - Gold and silver prices are modestly up and near their daily highs in early U.S. trading Wednesday. A sell off in the U.S. dollar index today is working in favor of the precious metals market bulls. December gold futures were last up $3.40 an ounce at $1,202.60. December Comex silver was last up $0.045 at $14.22 an ounce.
World stock markets were mostly lower overnight. U.S. stock indexes are also pointed toward lower openings when the New York day session begins. Global trade worries and the potential drag on the major economies of the world are weighing on equities this week. The U.S. and Canada are deadlocked on trade negotiations, while there are concerns the U.S. will slap more trade sanctions on China. Asian stock markets were also pressured today by weak economic data coming out of China.
Secondary currency markets, including the Argentine peso and Turkish lira, remain under pressure against the U.S. dollar. There are still worries this matter could turn into something more serious that impacts the global financial system.
In overnight news, the Euro zone composite purchasing managers index (PMI) came in at 54.4 in August versus 54.2 in July. The August reading was right in line with market expectations. A number above 50.0 suggests growth in the sector.
The key outside markets today find the U.S. dollar index lower after holding slight overnight gains. Meantime, Nymex crude oil prices are lower on a corrective pullback after hitting a 3.5-month high on Tuesday. Also, the storm in the Gulf of Mexico did not reach hurricane status, as some initially reckoned it would.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly Johnson Redbook and Goldman Sachs retail sales reports, the international trade in goods and services report, and the ISM New York report on business.
Technically, gold bears have the solid overall near-term technical advantage. Gold bulls' next upside near-term price breakout objective is to produce a close in December futures above solid resistance at last week's high of $1,220.70. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the August low of $1,167.10. First resistance is seen at Tuesday's high of $1,209.70 and then at $1,215.00. First support is seen at Tuesday's low of $1,195.10 and then at $1,189.50. Wyckoff's Market Rating: 2.0
December 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 $15.00 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 $14.405 and then at Tuesday's high of $14.59. Next support is seen at Tuesday's low of $14.035 and then at $14.00. Wyckoff's Market Rating: 1.0.