Gold Firmer Amid Anxious Marketplace
(Kitco News) - Gold prices are moderately higher in early U.S. trading Thursday, on more safe-haven buying ahead of an uncertain U.S. trading session following Wednesday’s pounding in the U.S. stock market and steep losses in Asian shares overnight. December gold futures were last up $4.40 an ounce at $1,235.40. December Comex silver was last up $0.089 at $14.76 an ounce.
Global stock markets were mixed to lower overnight, following the strong losses in U.S. stock indexes Wednesday that put those indexes into negative territory for this year. Asian stock markets were mostly lower overnight. China’s and South Korea’s stock markets are now in bear market territory, having dropped over 20% from their bull market highs. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Look for another volatile day in the U.S. markets.
There are near-term technical clues the U.S. stock indexes have put in near-term market tops, if not major tops. If that’s indeed the case, it’s a bullish element for hard assets like the precious metals.
Traders and investor can point to no one element that is spooking the world market place at present. There are geopolitical issues that include the U.S.-China trade war, U.S.-Saudi Arabia tensions over the murdered Saudi journalist, and Italy’s defiance over forming its budget to meet European Union rules. And there is creeping inflation in the world economies at present. Most don’t deem the inflation rates problematic, yet. However, there is a new generation of worldwide investors that have ostensibly never experienced inflation. So a 3% inflation rate could be spooking them.
Thursday’s European Central Bank regular monetary policy meeting saw no change in EU monetary policy, as expected. 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.
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 on a normal corrective pullback after hitting a nine-week high on Wednesday. Meantime, November Nymex crude oil prices are slightly weaker and trading just below $67.00 a barrel. Oil prices fell to a two-month low on Tuesday.
U.S. economic data due for release Thursday includes the weekly jobless claims report, durable goods orders, advance economic indicators, and the Kansas City Fed manufacturing survey.
Technically, gold bulls have the near-term technical advantage and gained more power Tuesday 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 this week’s high of $1,243.00 and then at $1,250.00. First support is seen at $1,228.00 and then at $1,220.00. Wyckoff's Market Rating: 6.0
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 this week’s low of $14.54 and then at the October low of $14.255. Wyckoff's Market Rating: 4.0.