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Solid Gold Gains As U.S. Stock Market Wobbles, USDX Sinks

Kitco News

(Kitco News) - Gold prices are solidly higher and setting new daily highs in early U.S. trading Friday, on safe-haven demand as U.S. stock indexes are pointed toward lower openings when the New York day session begins. The U.S. dollar index is also selling off and hitting its session low, further supporting buying interest in the precious metals markets. December gold futures were last up $9.60 an ounce at $1,224.60. December Comex silver was last up $0.082 at $14.345 an ounce.

Global stock markets were mixed in subdued trading overnight. U.S. stock indexes have backed well down from last week’s highs, to suggest still more selling pressure could be coming in the near term. Any significant downside price action in the U.S. stock indexes would more strongly support the safe-haven gold market.

In overnight news, the Euro zone consumer price index for October was reported up 0.2% from September and up 2.2%, year-on-year. Those numbers were in line with market expectations.

European traders and investors are still focused on the turmoil in the U.K. government regarding the U.K’s exit from the European Union (Brexit). The uncertainty of the matter has pressured European stock markets, the Euro currency and the British pound.

The key outside markets today find the U.S. dollar index trading slightly lower but still not far below this week’s 1.5-year high. The strong U.S. economy compared to most other world economies, and the interest rate differentials in those economies that see U.S. rates significantly higher, are bullish underlying elements that are likely to continue to provide strong support for the greenback.

Meantime, Nymex crude oil futures prices are higher on a corrective bounce after hitting and 11-month low of $54.75 earlier this week. The steep slide in oil prices is a bearish element for most of the raw commodity sector, as oil is arguably the leader of that sector.

U.S. economic data due for release Friday includes industrial production and capacity utilization, the Kansas City Fed manufacturing survey, and Treasury international capital data.

Live 24 hours gold chart [Kitco Inc.]

Technically, gold bears have the overall near-term technical advantage amid a fledgling downtrend in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at the November high of $1,239.30. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the September low of $1,184.30. First resistance is seen at $1,230.00 and then at $1,239.30. First support is seen at the overnight low of $1,213.70 and then at Thursday’s low of $1,207.10. Wyckoff's Market Rating: 3.5

Live 24 hours silver chart [ Kitco Inc. ]

December silver futures bears have the solid overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $14.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $13.50. First resistance is seen at $14.425 and then at $14.50. Next support is seen at $14.00 and then at this week’s low of $13.86. Wyckoff's Market Rating: 1.5.

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.