Gold Prices Gain As U.S. Dollar Rally Pauses
(Kitco News) - Gold prices are moderately higher in early U.S. trading Tuesday, supported in part by the U.S. dollar index backing down from the 16-month high scored last week. Look for a quieter trading session in the metals and in many other markets, as traders and investors await the outcome of the U.S. mid-term elections. December gold futures were last up $3.70 an ounce at $1,236.00. December Comex silver was last up $0.013 at $14.655 an ounce.
Global stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins.
Focus of the world marketplace is on today’s U.S. mid-term elections, which many believe are a referendum on the performance of President Trump. Big gains by the Democrats would likely be bearish for the U.S. stock market and would signal gridlock in Congress the next two years.
In overnight news, the European Union reported a hotter reading on its inflation today. The Euro zone September producer price index came in at up 0.5% from August and up 4.5%, year-on-year.
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 data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, and the global services PMI.
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 Monday’s low of $1,228.40 and then at $1,220.00. Wyckoff's Market Rating: 5.0
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.