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Gold, silver see price gains as Federal Reserve confab looms

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(Kitco News) - Gold and silver prices are higher in early morning trading Monday, as the key outside markets are favoring the precious metals bulls to start the trading week—a weaker U.S. dollar index and solidly higher crude oil prices. The precious metals are also getting a bid early this week on growing ideas the Federal Reserve will not be able to start tightening its monetary policy as soon as many had reckoned just a few weeks ago. October gold futures were last up $10.00 at $1,791.80 and September Comex silver was last up $0.338 at $23.45 an ounce.

Global stock markets were mostly firmer overnight. The U.S. stock indexes are pointed to higher openings when the New York day session begins. The focus of the marketplace this week is on the annual Federal Reserve symposium held in Jackson Hole, Wyoming. The confab has been pared back a bit and parts of it will be virtual this year due to the spreading delta variant of the coronavirus. Early this week, traders and investors are reassessing recent notions the Federal Reserve will lean hawkish on U.S. monetary policy at the Fed symposium. The rapidly spreading Covid variant has many now thinking the Fed will have to wait longer to reel in its easy-money policies. Dallas Fed President Rob Kaplan said Friday he is rethinking his call for an early tapering process for the Fed’s bond purchases, due to the spreading virus and its potential impact on the U.S. economy.

It appears there is less risk aversion in the global marketplace to start the trading week. There is still a chaotic situation in now-Taliban-controlled Afghanistan, with people, including Americans, still try to get out of that country. However, it appears the markets are now looking past the matter. Veteran market watchers are well aware of what can be the historically turbulent months of September and October that lie just ahead for the stock and financial markets.

The key outside markets today see the U.S. dollar index weaker after hitting a 10.5-month high last Friday. Nymex crude oil futures prices are solidly higher and trading around $64.00 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.28%.

U.S. economic data due for release Monday includes the Chicago Fed national activity index, the U.S. flash and services PMIs, and existing home sales.

Live 24 hours gold chart [Kitco Inc.]

Technically, October gold futures bulls have the slight overall near-term technical advantage and have momentum on their side. Bulls’ next upside price objective is to produce a close above solid resistance at $1,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,700.00. First resistance is seen at last week’s high of $1,795.00 and then at $1,800.00. First support is seen at the overnight low of $1,775.90 and then at last week’s low of $1,769.80. Wyckoff's Market Rating: 5.5

Live 24 hours silver chart [ Kitco Inc. ]

The silver bears have the firm overall near-term technical advantage. Prices are still in a three-month-old downtrend on the daily bar chart. Silver bulls' next upside price objective is closing September futures 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 August low of $22.295. First resistance is seen at $23.75 and then at $24.00. Next support is seen at $23.00 and then at last week’s low of $22.835. Wyckoff's Market Rating: 2.5.

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.