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Gold prices see more pressure from bullish U.S. equities

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(Kitco News) - Gold prices are modestly lower in early U.S. trading Tuesday. The safe-haven metals continue to see buying interest limited due to the bullish U.S. stock market that is setting record highs seemingly every day. The gold and silver market bulls can correctly argue their metals have been fairly resilient amid the record-setting run in the U.S. stock market. While the metals have eroded from their late-summer highs, they have not seen dramatic declines that one might expect when a competing asset class is setting record highs. December gold futures were last down $3.50 an ounce at 1,468.70. December Comex silver prices were last up $0.08 at $17.08 an ounce.

Focus of traders and investors is turning more to the civil unrest in Hong Kong, which is becoming more widespread and violent, and is bearish for Asian stock markets. Also, it appears mainland China government officials and Hong Kong officials are becoming more at odds on dealing with the protesting. Hong Kong has been a major business hub for years, but the protests in the streets are making the world’s businesses leery of dealing in Hong Kong. If this situation deteriorates much further, it would likely boost the safe-haven metals.

In other overnight news, China’s central bank slightly lowered its short-term repo rate Tuesday, and the People’s Bank of China governor said he will continue to work to lower real lending rates, as the government continues to work to stem the negative economic effects of its trade war with the U.S.

More details emerged overnight regarding President Trump’s meeting with Fed Chairman Powell on Monday morning. Trump late Monday tweeted that he told Powell U.S. interest rates are too high and that U.S. rates should be “lower than all others.” Trump in his tweet also said the U.S. dollar is too strong. This arm-twisting by Trump, who is ostensibly Powell’s boss, cannot help but influence Powell, if even just a bit, many market watchers believe. Such a scenario is also bullish for the metals markets.

The key “outside markets” today see the U.S. dollar index slightly higher. Nymex crude oil prices are lower and trading around $56.50 a barrel.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, and new residential construction.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bears have the slight overall near-term technical advantage. Prices are in a 2.5-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 the overnight high of $1,475.80 and then at $1,480.00. First support is seen at Monday’s low of $1,456.60 and then at $1,450.00. Wyckoff's Market Rating: 4.0.

Live 24 hours silver chart [ Kitco Inc. ]

December silver futures bears also have the overall near-term technical advantage. Prices are in a 2.5-month-old downtrend on the daily bar chart. A bear flag pattern has also formed recently. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.50 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 the overnight high of $17.16 and then at $17.25. Next support is seen at Monday’s low of $16.705 and then at the November low of $16.615. Wyckoff's Market Rating: 4.0.
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