Mild price rebounds in gold, silver, after Thursday's shellacking
(Kitco News) - Gold and silver prices are modestly up in early U.S. trading Friday, on tepid corrective bounces after strong losses suffered Thursday, when gold prices hit a four-week low and silver a five-week low. The near-term chart postures for both metals have turned more bearish this week, which suggests some more downside price pressure in the near term. October gold futures were last up $3.50 at $1,758.10. December Comex silver was last up $0.161 at $22.95 an ounce.
Global stock markets were mixed in overnight trading, with European indexes mostly weaker and Asian indexes mostly firmer. The U.S. stock indexes are pointed to modestly lower openings when the New York day session begins. It’s been a choppy trading week for the U.S. stock indexes, and such may continue to be the case until mid-week next week, when the Federal Reserve’s Open Market Committee (FOMC) concludes its monetary policy meeting.
The big Chinese property developer Evergrande saw its stock price plunge again overnight, which some are taking as a sign there are bigger underlying problems with China’s economy. China’s central bank injected liquidity into its financial system Friday—the first such action in seven months. The move was aimed at calming jittery Chinese markets. If this situation gets more serious, gold and silver markets could see some safe-haven demand occur.
In other overnight news, the Euro zone consumer price index for August was reported at up 0.4% from July and up 3.0%, year-on-year. Those numbers were right in line with market expectations and tame on the inflation front.
The key outside markets today see the U.S. dollar index weaker. Nymex crude oil futures prices are also lower and trading around $72.15 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.338%.
U.S. economic data due for release Friday is light and includes the University of Michigan consumer sentiment survey.
Technically, October gold futures bears have the overall near-term technical advantage. 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 the overnight high of $1,765.40 and then at $1,775.00. First support is seen at today’s low of $1,750.70 and then at this week’s low of $1,743.50. Wyckoff's Market Rating: 4.0
The silver bears have the solid overall near-term technical advantage and have gained more power this week. Silver bulls' next upside price objective is closing December futures prices above solid technical resistance at $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 the overnight high of $23.13 and then at $23.50. Next support is seen at today’s low of $22.81 and then at this week’s low of $22.585. Wyckoff's Market Rating: 2.0.