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Gold, silver see price declines despite keener uncertainty

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(Kitco News) - Gold and silver prices are lower in early U.S. trading Wednesday, despite some more risk aversion in the marketplace at mid-week. A rebound in the U.S. dollar index today is working against the precious metals markets. The metals traders appear to be focusing more on the direction of the USDX recently. December gold futures were last down $11.20 at $1,891.90 and December Comex silver was last down $0.545 at $23.91 an ounce.

The just-released ADP national employment report for September showed a rise of 749,000 jobs, which beat expectations for a gain of 600,000. This report precedes the U.S. economic data point of the week, which is Friday morning’s monthly jobless report for September from the Labor Department. The key non-farm payrolls number is forecast at up 875,000 and the unemployment rate is forecast at 8.2%.

Global stock markets were mostly weaker overnight. U.S. stock indexes are set to open the New York day session lower. The first U.S. presidential debate between President Donald Trump and Joe Biden that took place in Cleveland, Ohio Tuesday night produced unprecedented acrimony but probably did not move the needle much regarding changing voters’ minds. Still, the rancor from both sides that included President Trump saying he did not trust the mail-in voting process and not committing to urge his supporters to remain calm if he lost the election served to inject more uncertainty into an already unsettled marketplace.

Rising Covid-19 infections in major countries heading into colder weather and more inside activities in the Northern Hemisphere have raised more concerns about a second wave of the virus again shutting down businesses and damaging economies.

The U.S. government slapped a $920 million fine on investment bank JP Morgan Tuesday, as the firm admitted to manipulating precious metals and Treasury markets. That’s the largest fine ever levied by the U.S. for the manipulation, called “spoofing,” in which big trading orders are entered but then quickly cancelled. This news can be seen as at least a partial redemption for a vocal group of metals market watchers who have claimed for many years that JP Morgan has had a heavy hand in manipulating the gold market.

The important outside markets early today see the U.S. dollar index firmer after being under pressure Monday and Tuesday. Nymex crude oil prices are weaker and trading around $38.85 a barrel, as the oil market bulls are fading this week. Meantime, the yield on the U.S. Treasury 10-year note is trading around 0.65% today.

Today is the last trading day of the month and of the quarter, making it a more important day from a technical chart perspective.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, revised corporate profits and the third estimate of second-quarter GDP. Also on tap is the ISM Chicago business survey, pending home sales and the weekly DOE liquid energy stocks report.

Live 24 hours gold chart [Kitco Inc.]

Technically, the December gold futures bulls have the overall near-term technical advantage but prices are still trending down on the daily bar chart. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $1,925.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at this week’s high of $1,904.80 and then at $1,910.00. First support is seen at Tuesday’s low of $1,880.80 and then at the September low of $1,851.00. Wyckoff's Market Rating: 6.0

Live 24 hours silver chart [ Kitco Inc. ]

December silver futures bulls have the overall near-term technical advantage. However, prices are still trending lower on the daily chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $25.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the September low of $21.81. First resistance is seen at this week’s high of $24.545 and then at $25.00. Next support is seen at Tuesday’s low of $23.51 and then at $23.00. Wyckoff's Market Rating: 6.0.

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.