Gold, silver see more safe-haven demand as equities still wobbly
(Kitco News) - Gold and silver prices are higher in midday U.S. trading Tuesday. There is still some safe-haven demand today after Monday’s sharp sell off in global stock markets that still has traders and investors uneasy in late-September—what can be a historically tumultuous time of year for stock and financial markets. October gold futures were last up $13.20 at $1,775.00. December Comex silver was last up $0.416 at $22.62 an ounce.
Global stock markets were mostly up in overnight trading, while the U.S. stock indexes are higher at midday, on corrective bounces after the strong losses posted on Monday. It seems many in the marketplace are now thinking the big Chinese property developer, Evergrande, which is in serious financial trouble, will get a bailout from the Chinese government. Bloomberg reported overnight that S&P Global Ratings said Evergrande is on the verge of default. S&P said it believes authorities in Beijing would only step in if the failure of Evergrande led to far-reaching contagion that threatened China’s economy. The troubled firm must make an $83.5 million interest payment on Thursday. China’s markets remained closed Tuesday for a public holiday.
Coming into keener focus is the U.S. Federal Reserve’s two-day monetary policy meeting (FOMC) that began Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chairman Jerome Powell. The marketplace will scrutinize the Fed’s discussion on the timing of it likely tapering its bond-buying program, and on what the central bank says about inflation prospects. An dovish read on U.S. monetary policy by the marketplace would favor the metals market bulls, while a hawkish read would favor the metals bears.
The key outside markets today see the U.S. dollar index slightly lower after hitting a four-week high Monday. Nymex crude oil futures prices are slightly higher and trading around $70.50 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.323%.
Technically, gold bears still have the slight overall near-term technical advantage. A three-week-old price downtrend is in place on the daily bar chart. 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 today’s high of $1,780.80 and then at $1,790.00. First support is seen at today’s low of $1,756.30 and then at $1,750.00. Wyckoff's Market Rating: 4.5
The silver bears still have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $23.50 an ounce. The next downside price objective for the bears is closing prices below solid support at $21.00. First resistance is seen at today’s high of $22.72 and then at $23.00. Next support is seen at this week’s low of $22.025 and then at $21.75. Wyckoff's Market Rating: 1.5.
December N.Y. copper closed up 10 points at 411.45 cents today. Prices closed nearer the session high and hit a four-week low early on today. The copper bears have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the September high of 447.15 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 today’s high of 417.90 cents and then at this week’s high of 424.60 cents. First support is seen at today’s low of 401.60 cents and then at 400.00 cents. Wyckoff's Market Rating: 4.0.