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Gold, silver see price pressure as risk appetite ticks up

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(Kitco News) - Gold and silver prices are weaker in early U.S. trading Thursday. There is better risk appetite in the marketplace late this week and that’s bearish for the safe-haven metals. A weaker U.S. dollar index on this day is somewhat limiting the downside for the metals. October gold futures were last down $4.60 at $1,772.10. December Comex silver was last down $0.187 at $22.715 an ounce.

Global stock markets were mostly up in overnight trading. The U.S. stock indexes are also pointed to higher openings when the New York day session begins. Risk appetite is increasing late this week, following Monday’s sharp sell off in U.S. and global stock markets. The marketplace at present feels the troubled Chinese property giant, Evergrande, will not create a contagion effect in financial markets. Most believe the Chinese government will not let Evergrande fail. The firm had an $83 million interest payment due Thursday and it is not known if the payment was made.

The conclusion of the Federal Reserve’s FOMC meeting Wednesday afternoon saw the U.S. central bank make no monetary policy changes, but it did set the table for future tapering of its bond-buying program, and an increase in its key interest rate in 2022. Fed Chairman Powell at his press conference sounded upbeat on U.S. economic and jobs-growth prospects. Judging by the positive reactions of stock and financial markets, the Fed meeting’s results, while not leaning dovish, were not too hawkish on U.S. monetary policy.

The Bank of England held its regular monetary policy meeting Thursday and as expected made no major changes, leaving its key interest rate at 0.1%.

The U.S. government is grappling with extending the U.S. debt ceiling. Treasury Secretary Janet Yellen said the government will run out of money sometime in October. While looming over the marketplace, this situation has played out more than once over recent years, but it could still inject some anxiety into the marketplace, if the government actually nears a shutdown.

The key outside markets today see the U.S. dollar index lower. Nymex crude oil futures prices are a bit weaker and trading around $72.00 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.335%.  

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Chicago Fed national activity index, the U.S. flash services and manufacturing PMIs, the Kansas City Fed manufacturing survey, and leading economic indicators.

Live 24 hours gold chart [Kitco Inc.]

Technically, October gold futures bears have the slight overall near-term technical advantage. Prices are in a fledgling downtrend 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 this week’s high of $1,785.90 and then at $1,790.00. First support is seen at the overnight low of $1,758.20 and then at $1,750.00. Wyckoff's Market Rating: 4.5

Live 24 hours silver chart [ Kitco Inc. ]

The silver bears have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing December futures 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 $23.00 and then at this week’s high of $23.15. Next support is seen at $22.455 and then at this week’s low of $22.025. Wyckoff's Market Rating: 1.5.

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.