Gold, Silver Prices Down As Risk Appetite Up
(Kitco News) - Gold and silver prices are trading moderately lower in early U.S. trading today. Keener risk appetite is in the marketplace early this week, as evidenced by U.S. stock indexes that are solidly higher and near their recent contract and record highs. The strong rally in the U.S. dollar index late last week is also a bearish element for the precious metals markets. December gold futures were last down $4.80 an ounce at $1,191.40. December Comex silver was last down $0.127 at $14.585 an ounce.
World stock markets were mixed to firmer overnight. U.S. stock indexes are rallying on reports of a U.S.-Canada trade deal reached over the weekend. Chinese markets are closed until Friday for a public holiday.
Reports from China on Sunday said the U.S.-China trade war is taking a toll on China’s manufacturing sector, which has reduced its overall production. The Caixin manufacturing purchasing managers index (PMI) fell to 50.0 in September from 51.0 in August—ending 15 straight months of expansion.
This is leading to speculation China’s monetary officials could act to stimulate the economy, including devaluing its currency, the yuan, on the world foreign exchange market.
In other overnight news, the Euro zone jobless rate was reported at 8.1% in August versus 8.2% in July.
Focus in Europe is still on the new anti-establishment Italian government’s economic plan to address its fiscal and financial problems. The Euro currency has been pressured by this matter, which could be the next flash point in the currency and financial markets.
The key outside markets today find the U.S. dollar index slightly higher. Meantime, November Nymex crude oilprices are slightly higher and trading around $73.50 a barrel. Nymex crude prices are at contract and eight-month highs. Brent crude oil futures are at a four-year high.
U.S. economic data due for release Monday includes the U.S. manufacturing purchasing managers’ index, construction spending, the ISM report on business manufacturing, and the global manufacturing PMI.
Technically, gold bears have the overall near-term technical advantage and have gained downside momentum recently. Prices last week saw a bearish downside “breakout” from a 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 the overnight high of $1,196.50 and then at $1,200.00. First support is seen at last week’s low of $1,184.30 and then at $1,180.00. Wyckoff's Market Rating: 2.0
December silver futures bears have the overall near-term technical advantage, Friday’s strong rally and bullish weekly high close 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 the September low of $13.965. First resistance is seen at last week’s high of $14.755 and then at $15.00. Next support is seen at $14.25 and then at last week’s low of $14.195. Wyckoff's Market Rating: 3.0.