Gold Prices Pop As USDX Drops; U.S.-China Trade News Also Friendly
(Kitco News) - Gold prices are sporting decent gains in early-afternoon U.S. trading Wednesday. The yellow metal was under modest pressure overnight but prices started to move north as the U.S. dollar index moved south. There are also reports today the U.S. made an overture to China to restart trade talks. Ideas the world’s two largest economies may be moving closer to a trade agreement can be extrapolated to mean an eventual trade agreement would produce more U.S.-China commerce and in turn see better demand for precious metals coming from China. December gold futures were last up $7.10 an ounce at $1,209.30. December Comex silver was last up $0.117 at $14.265 an ounce.
Short covering in the gold and silver futures markets and perceived bargain-basement buying in the cash markets were featured today.
The key U.S. economic report today saw the August producer price index come in at down 0.1%, which was surprising as PPI was expected to be up 0.2% from July. That report did work to pressure the U.S. dollar index.
Traders were awaiting the Federal Reserve’s beige book to be released early this afternoon.
On Thursday the European Central Bank meets and is expected to report it will continue to pull back from years of a very easy monetary policy. The Bank of England also holds is regular monetary policy meeting Thursday.
The other key outside market today finds Nymex crude oil prices higher and above $70.00 a barrel—and near the recent summertime highs. That’s also bullish for the precious metals.
Technically, December gold futures bears still have the firm overall near-term technical advantage. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $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 last week’s high of $1,212.70 and then at $1,220.70. First support is seen at $1,200.00 and then at this week’s low of $1,192.70. Wyckoff's Market Rating: 3.0
December silver futures bears have the solid overall near-term technical advantage. There are no early clues to suggest a market bottom is close at hand. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $15.07 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $13.50. First resistance is seen at $14.405 and then at $14.59. Next support is seen at today’s low of $14.105 and then at this week’s low of $13.965. Wyckoff's Market Rating: 1.5.
December N.Y. copper closed up 565 points at 267.80 cents today. Prices closed nearer the session high today on short covering. The copper bears still have the firm overall near-term technical advantage. However, more good gains this week would begin to suggest a market bottom is in place. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the August high of 283.80 cents. The next downside price objective for the bears is closing prices below solid technical support at the August low of 257.45 cents. First resistance is seen at today’s high of 268.85 cents and then at 270.00 cents. First support is seen at 265.00 cents and then at today’s low of 260.65 cents. Wyckoff's Market Rating: 2.0.