Gold, silver prices up on keener risk aversion
(Kitco News) - Gold and silver prices are higher in early U.S. trading Wednesday. The precious metals are seeing some safe-haven demand at mid-week, along with some short covering in the futures markets following recent selling pressure. December gold futures were last up $11.90 an ounce at 1,465.30. December Comex silver prices were last up $0.228 at $16.93 an ounce.
Risk aversion is keener at mid-week following remarks made by President Trump in a speech in New York Tuesday. The mercurial Trump appeared to suggest the U.S. is not so keen on removing its tariffs on Chinese imports. While he said trade talks are going well and a “Phase 1” deal could be reached soon, reports have said the Chinese are adamant that the U.S. tariffs must be removed to get a Phase 1 trade deal signed. It should be not at all surprising that the marketplace’s perception of progress on the trade talks between the world’s two largest economies has down-ticked in recent days. The trade talks’ progress or lack thereof has been a rollercoaster affair for the markets for many months.
Asian and European stock indexes were mostly down overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins.
Gold and silver prices may also be seeing a safe-haven bid on Trump’s bashing of the Federal Reserve again in his remarks to economists in New York. Fed Chairman Jerome Powell testifies on the U.S. economy in front of Congress today and will surely be asked what he thinks about Trump’s latest bashing of the Fed. Trump’s browbeating of the Fed may or may not be a market factor or an influence on the Fed’s policy actions. However, many feel Powell has and will continue to lean easy on U.S. monetary policy due in part to Trump’s berating of him and the Fed for not lowering interest rates more.
Gold and silver are also benefitting from an escalation in protesting and violence this week in Hong Kong. The civil unrest is spreading in the city and appears likely to get worse before it gets better.
The key “outside markets” today see the U.S. dollar index slightly higher. Nymex crude oil prices are weaker and trading around $56.35 a barrel.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the consumer price index, real earnings and the monthly Treasury budget statement. Besides Powell’s speech to Congress today, several other Fed officials are slated to give speeches.
Technically, the gold bears still have the slight overall near-term technical advantage. Prices are in a two-month-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $1,500.00. Bears' next near-term downside price breakout objective is pushing December futures prices below solid technical support at $1,400.00. First resistance is seen at $1,475.00 and then at $1,500.00. First support is seen at the overnight low of $1,456.40 and then at this week’s low of $1,446.20. Wyckoff's Market Rating: 4.5
December silver futures bears also have the overall near-term technical advantage. Prices are in a two-month-old downtrend 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 $16.00. First resistance is seen at $17.10 and then at $17.25. Next support is seen at the overnight low of $16.72 and then at this week’s low of $16.615. Wyckoff's Market Rating: 4.0.