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Gold prices up; silver still running on rocket fuel

Kitco News

Editor's Note: The article was updated to reflect higher gold prices.

(Kitco News) - Gold prices are modestly higher in early U.S. trading Thursday, but silver continues to power ahead with sharp gains to hit another more-than-two-year high overnight. Safe-haven demand and technical buying continue to be featured in both metals. December gold futures were last up $4.60 an ounce at 1,553.70. December Comex silver prices were last up $0.279 at $18.74 an ounce.

A slightly weaker than expected U.S. gross domestic product report also landed in the camp of the precious metals market bulls. The second estimate of second-quarter GDP was up 2.0%, year-on-year, versus up 2.1% in the initial reading. However, the 2.0% print was right in line with market expectations.

Asian and European stock markets were mixed to higher overnight. U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins.

Risk appetite suddenly up-ticked overnight when news reports hit the wires that Chinese government officials (from the Commerce Ministry) have indicated they will not retaliate for the latest round of U.S. tariffs imposed on imports from China and said that the two countries remain in communication on the trade dispute matter. This news coming from China may or may not corroborate President Trump’s assertion earlier this week that a high-level Chinese trade official contacted the U.S. to restart trade negotiations.

Still, there are enough concerns on the geopolitical front to keep the safe-haven metals supported. Civil unrest in Hong Kong, the Brexit matter that will heat up this fall, and slowing global economic growth are all still front-burner issues for traders and investors.

The key “outside markets” today see Nymex crude oil prices up and trading around $56.00 a barrel. The U.S. dollar index is slightly firmer.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the second estimate of second-quarter gross domestic product, and pending home sales.

Technically, the gold bulls have the solid overall near-term technical advantage. A three-month-old uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in October futures above solid resistance at $1,600.00. Bears' next near-term downside price breakout objective is pushing December futures prices below solid technical support at $1,500.00. First resistance is seen at the overnight high of $1,559.80 and then at this week’s high of 1,565.00. First support is seen at today’s low of $1,542.70 and then at this week’s low of $1,534.80. Wyckoff's Market Rating: 8.0.

Live 24 hours gold chart [Kitco Inc.]

December silver futures bulls have the strong overall near-term technical advantage. Prices are in an accelerating three-month-old uptrend on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $19.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at this week’s low of $17.64. First resistance is seen at the overnight high of $18.75 and then at $19.00. Next support is seen at the overnight low of $18.41 and then at $18.17. Wyckoff's Market Rating: 9.0.

Live 24 hours silver chart [ Kitco Inc. ]

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.