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Gold, silver see modest price gains, hit 6-week highs

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(Kitco News) - Gold and silver futures prices are modestly up in early U.S. trading Friday, and did hit six-week highs overnight. The metals markets have been lifted this week due in part to a slumping U.S. dollar index that hit a nine-week low overnight. Safe-haven demand is also featured in the gold and silver markets Friday morning, heading into an uncertain weekend. December gold futures were last up $5.70 at $1,952.40 and December Comex silver was last up $0.569 at $25.76 an ounce.

The gold and silver markets have posted solid rallies in the wake of the U.S. elections, mostly boosted by the depreciating value of the U.S. dollar but also likely from safe-haven demand on worries about the peaceful transfer of power in the U.S., should Biden win the presidential election, and on the worsening Covid-19 situation in the U.S. and Europe. Trump gave a short speech Thursday night trying to cast doubt on the U.S. voting system, implying fraud. And U.S. Covid cases hit a record Thursday. Dr. Scott Gottlieb said Friday morning on CNBC the U.S. this winter will find “a raging epidemic.” A Wall Street Journal story Friday is headlined, “Fed Sees Virus Imperiling Economy,” referring to the just-concluded FOMC meeting in which the Federal Reserve warned that Covid-19 is still posing serious risks for the U.S. economy.

On tap Friday morning is the U.S. employment situation report for October from the Labor Department. The key non-farm payrolls number is seen up 530,000 and the unemployment rate is seen at 7.7% versus 7.9% seen in September. The usually front-burner data point of the month has been overshadowed this week by the U.S. elections and the turmoil surrounding them.

Asian and European stock markets were mixed overnight. U.S. stock indexes are set to open the New York day session lower on corrective pullbacks from this week’s strong gains. The U.S. presidential election is looking increasingly likely that Joe Biden will unseat President Trump. The balance of the U.S. Senate is still up in the air, with the possibility the Democrats could still gain a slim majority. Right after the elections it was assumed by most the Republicans would control the Senate. Now, with the chance the Democrats could gain control, the U.S. stock market bulls are a bit more concerned. Still, Friday morning’s price pressure on the stock indexes is so far just a normal correction from the recent gains.

The U.S. dollar index is lower again today, hit a nine-week low, and has sold off sharply in the wake of the U.S. election. The other important outside market sees crude oil prices lower and trading around $37.50 a barrel. The oil market is seeing a corrective pullback Friday after solid gains seen earlier this week. The yield on the benchmark 10-year U.S. Treasury note is currently fetching 0.77%.

Other U.S. economic data due for release Friday includes the consumer credit report and monthly wholesale trade.

Live 24 hours gold chart [Kitco Inc.]

Technically, the December gold futures bulls have the overall near-term technical advantage and are gaining momentum as prices have seen a bullish upside “breakout” from the recent sideways trading range. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the September low of $1,851.00. First resistance is seen at the overnight high of $1,959.10 and then at $1,975.00. First support is seen at the overnight low of $1,937.20 and then at $1,925.00. Wyckoff's Market Rating: 7.0

Live 24 hours silver chart [ Kitco Inc. ]

December silver futures bulls have the firm overall near-term technical advantage and they have gained momentum this week by producing a bullish upside breakout from the recent choppy trading range. 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 the October low of $22.625. First resistance is seen at $26.00 and then at $26.50. Next support is seen at the overnight low of $25.01 and then at $24.50. Wyckoff's Market Rating: 6.5.

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.