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Gold up, silver soars as risk aversion creeps back

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(Kitco News) - Gold prices are moderately higher and silver prices sharply up in early U.S. trading Monday. Risk aversion in the world marketplace has crept back to start the trading week, as there is still uncertainty on the geopolitical front. December gold futures were last up $10.20 an ounce at 1,525.30. December Comex silver prices were last up $0.566 at $18.415 an ounce.

Asian and European stock markets were mostly weaker in trading overnight. U.S. stock indexes are pointed toward near-steady openings when the New York day session begins.

There was more protesting and related violence in Hong Kong over the weekend, the U.S.-China trade negotiations have taken another step backward and there is mounting concern regarding weakening global economic growth. U.S.-Iran tensions are also smoldering in the background.

Purchasing managers’ index (PMI) reports coming out of the European Union Monday showed the Euro zone composite PMI for September come in at a lower-than-expected 50.4. A reading below 50.0 suggests contraction. More worrisome, Germany’s manufacturing PMI in September came in at 41.4, which was also worse than expected and suggests the German economy is teetering on recession.

Nymex crude oil prices are slightly weaker and trading around $58.00 a barrel. The Wall Street Journal reported over the weekend that it could take months, not weeks, to fully restore production at the oil installations attacked in Saudi Arabia in mid-September.

The other key outside market today sees the U.S. dollar index trading modestly up.

U.S. economic data due for release Monday includes the Chicago Fed national activity index, and the U.S. flash manufacturing and service purchasing managers’ indexes. Several Federal Reserve officials also are scheduled to speak today.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls have the solid overall near-term technical advantage as a four-month-old uptrend on the daily bar chart remains in place. 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 the September low of $1,490.70. First resistance is seen at $1,532.20 and then at 1,535.00. First support is seen at the overnight low of $1,517.90 and then at $1,510.00. Wyckoff's Market Rating: 7.5

Live 24 hours silver chart [ Kitco Inc. ]

December silver futures bulls still have the firm overall near-term technical advantage. A four-month-old uptrend remains in place 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 the September low of $17.47. First resistance is seen at $18.555 and then at $18.89. Next support is seen at $18.25 and then at $18.00. Wyckoff's Market Rating: 7.0.

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.