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Gold, silver prices down; new bullish inputs needed

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(Kitco News) - Gold and silver prices are solidly lower in early U.S. trading Tuesday, with gold sinking to a four-week low. There’s an old trading adage that says a strong bull market needs to be fed fresh bullish news on a regular basis. Now, the safe-haven metals are in need of a dose of bullish news. The technicals in gold and silver remain overall bullish, but more selling pressure in the near term would produce some chart damage. December gold futures were last down $12.20 an ounce at 1,498.80. December Comex silver prices were last down $0.182 at $17.985 an ounce.

Asian and European stock markets were narrowly mixed overnight. U.S. stock indexes are pointed toward modestly lower openings when the New York day session begins. Generally, there remains low risk aversion in the world marketplace at present. However, there are geopolitical elements that could quickly come to the front burner, including civil unrest in Hong Kong and U.S.-Iran tensions. Also, reports today said North Korea has launched more missiles.

In overnight news, China’s consumer price index rose 2.8% in August, year-on-year, which was the same rate as July. The rise was more than expected and was led by surging pork prices. China’s producer prices were down 0.8% in August, year-on-year, due in part to the negative effects of China’s trade war with the U.S. China’s central bank eased its monetary policy last week and is likely to do it again in the near term.

Focus is turning to the monetary policy meeting of the European Central Bank on Thursday, at which time the ECB is expected to cut interest rates, pushing them further into negative territory.

The key “outside markets” today see Nymex crude oil prices slightly firmer and trading around $58.00 a barrel. Thursday sees a meeting of the OPEC oil cartel. Oil prices have rallied recently on ideas OPEC nations will continue to constrict their spigots. The U.S. dollar index is firmer in early U.S. trading today.

U.S. economic data due for release Tuesday is light and includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, and the NFIB small business index.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls still have the overall near-term technical advantage but are fading and they need to show fresh power soon. A three-month-old uptrend on the daily bar chart is now in jeopardy. Bulls’ next upside price objective is to produce a close in October futures above solid resistance at the September high of $1,566.20. Bears' next near-term downside price breakout objective is pushing December futures prices below solid technical support at $1,475.00. First resistance is seen at the overnight high of $1,508.00 and then at 1,520.00. First support is seen at today’s low of $1,494.30 and then at $1,488.90. Wyckoff's Market Rating: 6.5

Live 24 hours silver chart [ Kitco Inc. ]

December silver futures bulls have the firm overall near-term technical advantage but have faded recently. Prices are in a three-month-old uptrend on the daily bar chart but now just barely. 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 $17.50. First resistance is seen at this week’s high of $18.40 and then at $18.50. Next support is seen at today’s low of $17.855 and then at $17.75. Wyckoff's Market Rating: 6.5.

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