Gold, silver bulls stabilize mkts; bears already may be exhausted
(Kitco News) - Gold and silver futures prices are higher in midday U.S. trading Wednesday. The precious metals bulls today stabilized prices after Tuesday’s huge declines. In fact today’s high-range daily closes amid the big daily trading ranges have produced selling “exhaustion tails” on the daily bar charts for gold and silver, to suggest today’s lows are near-term market bottoms. October gold futures were last up $7.70 an ounce at $1,946.00. September Comex silver prices were last up $0.031 at $26.08 an ounce.
Now, gold and silver markets have an important near-term “line drawn in the sand”—today’s lows. (See technical analysis paragraphs below.)
Global stock markets were mostly up in overnight trading and the U.S. stock indexes are also higher at midday. At mid-week, risk appetite remains elevated and there are signs marketplace psychology is changing a bit regarding the Covid-19 pandemic. Even though most believe the Russian vaccine approval announced Tuesday is premature and a stunt by Russian President Putin, there appears to be growing notions the worst of the coronavirus may be behind—both economically and in the human toll. Nations are working feverishly on a legitimate vaccine that may be available in the fourth quarter of this year, and if not then it would likely come early next year. Some health experts are now saying that humans’ own self-defense systems may work better at fighting off Covid than most in the health profession initially expected. Major global economies are rebounding, if even some are doing it in fits and starts, and it’s becoming less likely there will be the kind of encompassing business shutdowns like those which occurred in the spring, even if the pandemic remains uncontrolled. In the U.S., Covid infection rates have fallen this week and the U.S. Congress may be inching closer to a new stimulus package for Americans.
All of the aforementioned elements are bullish for stocks and some commodities, and bearish for safe-haven U.S. Treasuries, gold and silver. That’s all the more impressive for gold and silver’s market action Wednesday, in which prices stabilized. Yields on the benchmark U.S. 10-year Treasury note have climbed rapidly this week and are presently fetching around 0.66% after hovering around 0.5% and near a record low just last week.
The important outside markets today see Nymex crude oil prices firmer and trading around $42.35 a barrel. The U.S. dollar index is weaker.
Technically, October gold prices were near the session high after hitting a three-week low of $1,865.00 overnight. The gold bulls have the firm overall near-term technical advantage, but now need to defend what is now the latest “reaction low” in the still-existing price uptrend on the daily chart—today’s low of $1,865.00. A drop below that level would negate the near-term price uptrend to suggest a near-term market top is in place. Bulls’ next upside price objective is to produce a close in October futures above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,865.00. First resistance is seen at $1,975.00 and then at $2,000.00. First support is seen at $1,925.00 and then at $1,900.00. Wyckoff's Market Rating: 7.0
September silver futures prices were near the session high. September silver futures bulls have the firm overall near-term technical advantage, but now need to defend what is the latest “reaction low” in the still-existing price uptrend on the daily chart—today’s low of $23.58. A drop below that level would negate the price uptrend to suggest a near-term market top is in place. Silver bulls' next upside price objective is closing prices above solid technical resistance at $28.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $23.58. First resistance is seen at $26.50 and then at $27.00. Next support is seen at $25.50 and then at $25.00. Wyckoff's Market Rating: 7.0.
September N.Y. copper closed up 160 points at 289.20 cents today. Prices closed nearer the session high today and scored a bullish “outside day” up on the daily bar chart. The copper bulls have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 300.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 270.00 cents. First resistance is seen at today’s high of 290.25 cents and then at last week’s high of 293.95 cents. First support is seen at today’s low of 280.75 cents and then at the August low of 278.20 cents. Wyckoff's Market Rating: 7.0.