Strong Gains In U.S. Dollar Bearish For Gold, Silver
(Kitco News) - Gold prices are trading near steady and silver prices are modestly up in early U.S. trading Friday. Gold futures prices dropped to another a four-week low overnight. The metals late this week are seeing limited buying interest due to a strong rally in the U.S. dollar index. Also, half-way through the historically markets-turbulent September-October timeframe finds risk aversion low among traders and investors. December gold futures were last up $0.10 an ounce at $1,187.50. December Comex silver was last up $0.105 at $14.395 an ounce.
World stock markets were mostly lower overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. Recent strength in the U.S. stock market finds the major U.S. indexes not far below their recent record highs.
Today is the last trading day of the week, of the month, and of the quarter, which makes it an extra important day from a technical chart perspective. Also, late this week could be seeing portfolio and fund managers squaring their positions for “window-dressing” purposes as the month and the quarter wind down.
In overnight news, inflation in the Euro zone heated up a bit. Consumer prices in the region rose at a 2.1% annual rate in September. The reading was the highest in a year and a half.
Focus in Europe is on the new Italian government’s economic plan to address its fiscal and financial problems, which are required by European Union law. Italy’s just-released economic and financial projections were deemed problematic by the marketplace. Thus, the Euro currency is pressured late this week. This matter could be the next flash point in the currency and financial markets.
November Nymex crude oil prices are slightly higher and trading just above $72.00 a barrel. Nymex crude prices at contract and eight-month highs should be a bullish element for the precious metals markets, but the metals seem to be paying little attention.
U.S. economic data due for release Friday includes personal income and outlays, the ISM Chicago business survey, and the University of Michigan consumer sentiment survey.
Technically, gold bears have the overall near-term technical advantage and have gained downside momentum late this week. Prices saw a bearish downside “breakout” from the recent sideways trading range 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 $1,220.70. 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 $1,200.00 and then at this week’s high of $1,208.80. First support is seen at $1,180.00 and then at $1,175.00. Wyckoff's Market Rating: 2.0
December silver futures bears have the overall near-term technical advantage, but recent sideways price action still suggests a market bottom is in place. 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 $13.50. First resistance is seen at this week’s high of $14.595 and then at $14.75. Next support is seen at this week’s low of $14.195 and then at last week’s low of $14.065. Wyckoff's Market Rating: 2.5.