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Gold, Silver Prices Weaker As Busy Trading Week Looms

Kitco News

(Kitco News) - Gold and silver prices are moderately lower in early U.S. trading Monday, as what will likely be a very active trading week gets under way. December gold futures were last down $4.30 an ounce at $1,228.90. December Comex silver was last down $0.131 at $14.625 an ounce.

Global stock markets were mixed overnight, with European shares mostly firmer and Asian shares mostly weaker. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins.

Expectations for a U.S.-China trade deal have been ratcheted down early this week, following some positive signs on the matter late last week. President Trump late last week sounded upbeat on a deal being reached soon with China. However, Trump’s chief economic advisor Larry Kudlow then downplayed any imminent breakthrough on the U.S.-China trade war.

In another sign that China’s economy is being significantly impacted by the trade war with the U.S., a report over the weekend showed China’s service sector slowed to a 13-month low. The weakening Chinese economy is a bearish element for the metals markets, as China is the world’s largest metals importer.

Focus in the U.S. is on Tuesday’s mid-term elections, which many believe will be a referendum on the performance of President Trump. Gains by the Democrats would likely be bearish for the U.S. stock market.

On Wednesday and Thursday the Federal Reserve’s Open Market Committee (FOMC) meets to discuss U.S. monetary policy, with a statement due Thursday afternoon. No change in interest rates is expected at this meeting.

U.S. economic sanctions against Iran go into effect today, including the U.S. penalizing other countries that do business with the regime.

The key outside markets today see the U.S. dollar index slightly lower. Meantime, December Nymex crude oil prices are slightly weaker and trading just below $63.00 a barrel.

U.S. economic data due for release Monday includes the U.S. services PMI, the ISM non-manufacturing index and the IBD/TIPP economic optimism index.

Live 24 hours gold chart [Kitco Inc.]

Technically, gold bulls and bears are on a level overall near-term technical playing field. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at the October high of $1,246.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,200.00. First resistance is seen at last week’s high of $1,239.30 and then at $1,246.00. First support is seen at $1,225.00 and then at $1,220.00. Wyckoff's Market Rating: 5.0

Live 24 hours silver chart [ Kitco Inc. ]

December silver futures bears have the overall near-term technical advantage. However, recent price action 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 $14.95 and then at $15.00. Next support is seen at $14.50 and then at last week’s low of $14.24. Wyckoff's Market Rating: 3.0.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.