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Gold, silver see more price pressure as USDX surging

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(Kitco News) - Gold and silver prices are lower again in the early U.S. trading Friday. Both metals are not far above this week’s two-month lows. An appreciating U.S. dollar index that hit another two-month high overnight is bearish for the metals markets. Also, near-term technical damage has been inflicted in gold and silver this week, which is inviting shorter term, chart-based sellers into the futures markets. December gold futures were last down $13.80 at $1,863.00 and December Comex silver was last down $0.261 at $22.93 an ounce.

Gold and silver bulls have been perplexed this week by their metals’ prices plunging despite the keener trader and investor anxiety that history suggests should support the precious metals markets. One FXTM analyst in this morning’s email dispatch laid out this bullish scenario: “Gold prices (are) likely to rise again as debt markets struggle with new issuance. Demand for debt in Southeast Asian markets falls (Bloomberg). If corporates and governments are not able to borrow then new equity will need to be raised. If governments are not able to issue more debt, then more cash may be printed or interest rates raised. Raising interest rates is not good for economic development and printing cash is normally viewed as inflationary. Either way gold prices look likely to rise.” Many market watchers would argue this thesis is an outlier.

Global stock markets were mixed to mostly weaker overnight. U.S. stock indexes are set to open the New York day session lower and also set to score a fourth week in a row of declines. Risk aversion remains keener to end the trading week. “As we go into the fourth quarter, risks are starting to pile up,” said one analyst. Covid-19 cases are on the rise in many major industrialized countries, with no proven vaccine on the horizon. Questions about the U.S. presidential election and the smooth transfer of power if President Trump loses the electoral college vote count also are unsettling to traders and investors. Heightened trade and political tensions between the world’s two largest economies—the U.S. and China—are also dampening marketplace attitudes.

U.S. House of Representative Democrats are pushing a revised and smaller stimulus package for Americans and U.S. businesses, but Republicans say they doubt any deal before election day will occur.

The important outside markets early today see the U.S. dollar index up and near this week’s two-month high. Nymex crude oil prices are weaker and trading around $40.00. Meantime, the yield on the U.S. Treasury 10-year note is trading around 0.66% today.

U.S. economic data due for release Friday is light and includes durable goods orders.

Live 24 hours gold chart [Kitco Inc.]

Technically, the December gold futures bulls have the slight overall near-term technical advantage but have faded badly this week. Prices are trending down on the daily bar chart. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $1,900.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at the overnight high of $1,879.30 and then at $1,900.00. First support is seen at this week’s low of $1,851.00 and then at $1,825.00. Wyckoff's Market Rating: 5.5

Live 24 hours silver chart [ Kitco Inc. ]

December silver futures bulls have this week lost their the overall near-term technical advantage. Prices are trending lower on the daily chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at Wednesday’s high of $24.62 an ounce. The next downside price objective for the bears is closing prices below solid support at $20.00. First resistance is seen at the overnight high of $23.415 and then at $23.80. Next support is seen at the overnight low of $22.52 and then at $22.00. 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.