Gold prices up on Brexit uncertainty
(Kitco News) - Gold prices are moderately higher in early U.S. trading Wednesday, on a bit of risk aversion amid the Brexit saga playing out. December gold futures were last up $8.70 an ounce at 1,496.30. December Comex silver prices were last up $0.085 at $17.585 an ounce.
Asian and European stock indexes were mixed but mostly weaker overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. Caterpillar reported a big earnings miss to the downside this morning, which is pressuring U.S. stock indexes.
The Brexit uncertainty is still weighing on European equities and even some global stock markets, to a lesser degree. The British Parliament is wrangling with U.K. Prime Minister Boris Johnson on the timing of the U.K. leaving the European Union. Johnson wants a resolution to the matter and a Brexit sooner. Parliament is divided on the topic. Right now, October 31 is the official Brexit date.
The Indian Diwali festival begins Friday. Gold demand from Indian consumers usually rises during the festival. However, reports say Indian consumer gold demand could decrease up to 50% this year due to higher gold prices and an increase the country’s gold import duty.
The key “outside markets” today find Nymex crude oil prices higher in early U.S. trading today and trading around $54.20 a barrel. Meantime, the U.S. dollar index is slightly up on a mild corrective bounce from recent selling pressure that drove the index to a nine-week low earlier this week.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the monthly house price index and the weekly DOE liquid energy stocks report.
Technically, the gold bulls have the overall near-term technical advantage. A six-week-old downtrend line is still in place on the daily bar chart. The recent “collapse in volatility” of prices the past three sessions suggests a bigger price move is on the horizon. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $1,525.00. Bears' next near-term downside price breakout objective is pushing December futures prices below solid technical support at the October low of $1,465.00. First resistance is seen at $1,500.00 and then at last week’s high of $1,503.00. First support is seen at $1,490.00 and then at last week’s low of $1,478.00. Wyckoff's Market Rating: 6.0
December silver futures bulls have the overall near-term technical advantage and are working on negating a six-week-old downtrend line 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 the October low of $16.94. First resistance is seen at this week’s high of $17.895 and then at $18.00. Next support is seen at this week’s low of $17.44 and then at $17.33. Wyckoff's Market Rating: 6.0.