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Gold prices up, but keying off U.S. Stock Market

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(Kitco News) - Gold and silver prices are trading moderately higher in midday action Thursday. Both metals are looking to a wobbly U.S. stock market for direction. A big morning sell off in U.S. equities pushed the safe-haven metals to daily highs but then when the stock market erased its losses gold and silver retraced about half of their early solid gains. The gold and silver markets will continue to look to the U.S. stock market for near-term direction. December gold futures were last up $7.40 an ounce at 1,515.30. December Comex silver prices were last up $0.017 at $17.70 an ounce.

There was some weak U.S. economic data released this morning that sent the U.S. stock market reeling. The ISM non-manufacturing index for September came in at 52.6 versus expectations for a reading of 55.3. The news followed downbeat U.S. manufacturing data released Tuesday.

There are still global economic growth and trade worries hanging over the world marketplace after some dour manufacturing data coming out of the U.S. and European Union earlier this week.

A World Trade Organization trade-dispute decision in favor of the U.S. over the European Union on aircraft has rattled European markets, as the U.S. then announced late Wednesday it will levy new import tariffs on EU products coming into the U.S.

In another sign of very low and even worrisomely low inflation in most of the world’s major economies, the Euro zone today reported its August producer price index down 0.5% from July and down 0.8%, year-on-year.

Traders are also awaiting Friday’s morning’s employment situation report for September from the U.S. Labor Department. Friday’s key non-farm payrolls number is forecast to be up 145,000 in September.

The U.S. dollar index is lower in midday U.S. trading. The USDX hit a contract and two-year high earlier this week. Look for the greenback to continue to appreciate for at least the near term. Meantime, Nymex crude oil prices are lower at midday and trading around $52.00 a barrel. Oil prices are in a steep slide from the spike high scored in September.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls have the overall near-term technical advantage and have regained momentum late this week. Still, a four-week-old downtrend line is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $1,543.30. Bears' next near-term downside price breakout objective is pushing December futures prices below solid technical support at this week’s low of $1,465.00. First resistance is seen at today’s high of $1,525.80 and then at $1,530.00. First support is seen at $1,500.00 and then at $1,490.00. Wyckoff's Market Rating: 6.5

Live 24 hours silver chart [ Kitco Inc. ]

December silver futures bulls and bears are back on a level overall near-term technical playing field. A four-week-old downtrend is still in place on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $18.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at this week’s low of $16.94. First resistance is seen at today’s high of $17.845 and then at $18.00. Next support is seen at $17.50 and then at Wednesday’s low of $17.24. Wyckoff's Market Rating: 5.0.

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.