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Gold, silver see routine downside price corrections

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(Kitco News) - Gold and silver prices are lower in early U.S. trading Tuesday, on normal corrective pullbacks after recent good gains that saw both metals score around four-week highs last Friday, and amid price uptrends that are still in place on the daily bar charts. A higher U.S. dollar index and lower crude oil prices to start the U.S. trading week are also working against the precious metals market bulls. October gold futures were last down $21.90 at $1,809.60. December Comex silver was last down $0.472 at $24.32 an ounce.

Global stock markets were mixed in quiet overnight trading. The U.S. stock indexes are pointed to narrowly mixed openings when the New York day session begins. Time to get back to work for those North American and European traders and investors that had been coasting the past several weeks. With U.S. stock indexes not far below their recent record highs, market watchers are wondering if those gains can be extended in the coming weeks, during what history shows can be rocky times for the stock and financial markets. Economic data highlights this week include scheduled speeches by some U.S. Federal Reserve officials and the regular monetary policy meeting of the European Central Bank on Thursday. Last Friday’s downbeat U.S. jobs report has many thinking the Fed won’t be able to taper its bond-buying as soon as many Fed officials want.

In overnight news, the Australian central bank said it is going to reduce its bond-buying program by 20%. The central bank left its interest rates unchanged.

Meantime, China got some good economic numbers as its exports in August were up 25.6%, year-on-year, which handily beat expectations of up 17%. Imports rose 33.1% compared to expectations of up 25.7%. The figures were in U.S. dollar terms.

The key outside markets today see the U.S. dollar index higher as the greenback tries to recover from recent strong selling pressure that pushed prices to a four-week low last week. Nymex crude oil futures prices are lower and trading around $68.50 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.365%.  

U.S. economic data due for release Tuesday is light and includes the employment trends index.

Live 24 hours gold chart [Kitco Inc.]

Technically, October gold futures bulls still have the overall near-term technical advantage. Prices are in a four-week-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the July high of $1,836.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,775.00. First resistance is seen at $1,823.60 and then at last week’s high of $1,834.50. First support is seen at $1,800.00 and then at $1,790.00. Wyckoff's Market Rating: 6.0.

Live 24 hours silver chart [ Kitco Inc. ]

The silver bulls and bears are on a level overall near-term technical playing field but bulls are making headway and working on a four-week-old price uptrend on the daily chart. Silver bulls' next upside price objective is closing December futures prices above solid technical resistance at $26.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at last week’s high of $24.945 and then at $25.00. Next support is seen at $24.00 and then at last week’s low of $23.775. 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.