Gold, silver prices rally as ECB leans easy
(Kitco News) - Gold and silver prices are sharply up and at daily highs in early U.S. trading Thursday. The precious metals bulls needed a jolt of good news and they got it today when the European Central Bank was aggressive in easing its monetary policy. December gold futures were last up $21.90 an ounce at 1,525.10. December Comex silver prices were last up $0.38 at $18.55 an ounce.
The just-concluded monetary policy meeting of the European Central Bank saw the bank act significantly ease its monetary policy--more than the marketplace expected. The ECB lowered interest rates by 0.1%, to minus 0.5%, and also announced a new “quantitative easing” bond-buying program, which is the largest in over three years. The Federal Reserve meets next week and is expected to cut U.S. interest rates by 0.25%. President Trump on Wednesday called the Federal Reserve “boneheads” for not lower interest rates faster and farther.
Asian stock markets were mostly up overnight, while European stock indexes were mostly weaker. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Trader and investor risk appetite remains generally elevated late this week.
The trade tensions between the world’s two largest economies—the U.S. and China—have ratcheted down a notch this week. The U.S. has announced the slight delay of implementation of some tariffs on China that were set to take effect October 1. This follows the move by China this week to exempt some U.S. products from their own tariffs. Both sides are set to hold talks in October. Reports today said China is looking to narrow the scope of the negotiations to trade only—leaving out other matters that have been sticking points, such as national security.
The U.S. economic highlight of the day Thursday is the consumer price index report for August, expected to come in at up 0.1% from July and up 1.8%, year-on-year.
The key “outside markets” today see Nymex crude oil prices lower and trading around $55.00 a barrel. Thursday sees a meeting of the OPEC oil cartel. The U.S. dollar index is higher in early U.S. trading today, boosted by the weaker Euro currency in the wake of the ECB easing.
Other U.S. economic data due for release Thursday includes the weekly jobless claims report, real earnings and the monthly Treasury budget statement.
Technically, the gold bulls have the firm overall near-term technical advantage and are keeping alive a three-month-old uptrend on the daily bar chart. 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 this week’s low of $1,492.10. First resistance is seen at $1,535.00 and then at 1,540.00. First support is seen at $1,510.00 and then at $1,500.00. Wyckoff's Market Rating: 7.0
December silver futures bulls have the firm overall near-term technical advantage. Prices are in a 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 $17.50. First resistance is seen at $18.76 and then at $19.00. Next support is seen at $18.25 and then at the overnight low of $18.085. Wyckoff's Market Rating: 7.0.