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Upbeat U.S. economic data, rally in USDX sink gold, silver

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(Kitco News) - Gold and silver prices are sharply lower in midday U.S. trading Thursday. Gold prices hit a four-week low and silver a five-week low. Stronger-than-expected U.S. economic reports on Thursday morning, which rallied the U.S. dollar index, helped to send gold and silver prices south. The near-term chart postures for both metals have deteriorated significantly this week, which is also inviting the shorter-term futures traders to play the short side of the markets. October gold futures were last down $41.10 at $1,751.50. December Comex silver was last down $1.056 at $22.74 an ounce.

U.S. retail sales in August came in at up 0.7% in August, when traders were looking for a decline of 0.8%. U.S. jobless claims rose slightly but remained near pandemic lows. Claims have trended lower since mid-July. These reports favor the U.S. monetary policy hawks, who would like to see the Federal Reserve implement a tapering of its monthly bond-buying program sooner rather than later.

Global stock markets were mostly weaker in overnight trading. The U.S. stock indexes are lower at midday. Global shares saw some price pressure Thursday due in part to worries about an economic slowdown in China, the world’s second-largest economy and a major metals importer. Reports coming out of China say giant property developer China Evergrande Group has serious debt problems that could be just the tip of the iceberg for China’s housing sector that plays a big role in China’s economic growth.

The other key outside market today sees Nymex crude oil futures prices weaker and trading around $72.15 a barrel.  Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.334%. 

Live 24 hours gold chart [Kitco Inc.]

Technically, gold bears have gained the overall near-term technical advantage. A four-week-old price uptrend on the daily bar chart has been negated. 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 $1,765.00 and then at $1,780.00. First support is seen at today’s low of $1,743.50 and then at $1,735.00. Wyckoff's Market Rating: 4.0

Live 24 hours silver chart [ Kitco Inc. ]

The silver bears have the solid overall near-term technical advantage and gained more power today. Silver bulls' next upside price objective is closing prices above solid technical resistance at today’s high of $24.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the August low of $22.35. First resistance is seen at $23.00 and then at $23.36. Next support is seen at today’s low of $22.485 and then at $22.35. Wyckoff's Market Rating: 2.0.

December N.Y. copper closed down 1,175 points at 428.75 cents today. Prices closed nearer the session low today. The copper bulls and bears are back on a level overall near-term technical playing field amid choppy trading. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the July high of 458.60 cents. The next downside price objective for the bears is closing prices below solid technical support at the August low of 396.65 cents. First resistance is seen at 440.00 cents and then at the September high of 447.15 cents. First support is seen at today’s low of 427.50 cents and then at 425.00 cents. 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.