Price pressure on gold, silver as equities gain
(Kitco News) - Gold and silver futures prices are lower in early U.S. trading Wednesday, as global equity markets were mostly up, despite the pandemic that continues to rage in the U.S. and much of Europe. December gold futures were last down $16.50 at $1,868.30 and December Comex silver was last down $0.271 at $24.38 an ounce.
U.S. stock indexes are pointed toward firmer openings when the New York day session begins. The marketplace is presently grappling with the specter of a Covid-19 vaccine coming to the public in the coming months that will likely give economies a strong boost, while at the same time realizing it’s going to be a grim winter as the pandemic continues to rage in many areas around the globe, including the U.S. and parts of Europe. On this day so far, it appears traders are more focused on the promising vaccine.
Still weighing on trader/investor sentiment, however, is the likelihood that no new U.S. government stimulus package is on horizon despite millions of Americans struggling after Covid wiped out their jobs.
In overnight news, the Euro zone October consumer price index rose 0.2% from September and was down 0.3%, year-on-year. Those numbers were in line with market expectations and still don’t show any signs of problematic inflation any time soon. Once the pandemic is under control and economies start to recover rapidly, that’s likely when producer and consumer prices could start to rise at a faster clip.
The U.S. dollar index is weaker again early today and the greenback bears are having a good week. The other important outside market sees crude oil prices higher and trading around $42.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading at 0.86%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, new residential construction and the weekly DOE liquid energy stocks report.
Technically, the December gold futures bulls still have the overall near-term technical advantage but trading has been choppy. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at the November high of $1,966.10. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,848.00. First resistance is seen at the overnight high of $1,883.80 and then at this week’s high of $1,898.00. First support is seen at the overnight low of $1,860.30 and then at $1,848.00. Wyckoff's Market Rating: 6.5
December silver futures bulls have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $27.00 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 the overnight high of $24.74 and then at this week’s high of $25.155. Next support is seen at the overnight low of $24.235 and then at $24.00. Wyckoff's Market Rating: 6.5.