Gold Prices Power To 3-Mo. High On Safe-Haven Demand
(Kitco News) - Gold prices are solidly higher and have hit a nearly three-month high in early U.S. trading Tuesday, boosted by safe-haven demand amid keener geopolitical uncertainty in the marketplace. December gold futures were last up $17.20 an ounce at $1,241.70. December Comex silver was last up $0.223 at $14.805 an ounce.
Buckle your seat belts today, folks. Global stock markets were mostly lower overnight as risk aversion has returned to the marketplace amid geopolitical tensions. China’s stock indexes were sharply down after good gains posted Monday. South Korea’s and Japan’s stock markets were also sharply lower. U.S. stock indexes are pointed toward solidly lower openings when the New York day session begins. The U.S. indexes are back near their October lows.
The S&P 500 stock index has just dropped below what was strong chart support at its October low. Such suggests a new leg down in prices is coming for the U.S. stock market. That’s bullish for hard assets such as gold and silver.
The Turkish president went on television overnight to explain that the Saudi journalist that was killed in a Saudi consulate in Istanbul was brutally slain in a planned attack. The Saudi kingdom denies involvement in the murder. The U.S. and other Western nations are trying to get to the bottom of the matter, but President Trump has been cautious about the situation, what with the strong U.S. business ties to Saudi Arabia.
The China-U.S. trade showdown is negatively impacting China’s economy and weighing on Asia’s stock markets. Two U.S. warships are presently traveling near China and through the Taiwan Strait, to amplify tensions.
Thursday’s European Central Bank regular monetary policy meeting will be closely watched by the marketplace. No change in EU monetary policy is expected, but ECB chief Mario Draghi’s press conference could provide clues on future moves by the central bank. Also, Draghi could comment on the rift between Italy’s new government and the EU. European stock markets are wobbly this week as the Italian government is scoffing at EU budget rules.
The U.S. economic highlight this week will be the first estimate of third-quarter GDP due out Friday morning. GDP is seen up 3.4% in the third quarter, on an annual basis.
The key outside markets today find the U.S. dollar index weaker. Meantime, November Nymex crude oil prices are lower and trading just above $68.00 a barrel.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, and the Richmond Fed business survey.
Technically, gold bulls have the near-term technical advantage and gained more power today as prices saw a bullish upside “breakout” from the recent sideways trading range. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $1,275.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,220.00. First resistance is seen at $1,250.00 and then at $1,260.00. First support is seen at $1,236.90 and then at $1,230.00. Wyckoff's Market Rating: 6.5
December silver futures bears still have the 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 the September low of $13.965. First resistance is seen at last week’s high of $14.88 and then at the October high of $14.95. Next support is seen at the overnight low of $14.54 and then at last week’s $14.47. Wyckoff's Market Rating: 4.0.