Gold, silver sink as bond yields rise, USDX rallies
(Kitco News) - Gold and silver prices are lower at midday, but up from their daily lows. Gold hit a six-week low in overnight trading. Rising government bond yields and a stronger U.S. dollar index early this week are bearish elements for the metals markets. The safe-haven metals bulls are once again frustrated that risk-off attitudes in the marketplace today are not providing price support to their markets. December gold futures were last down $15.20 at $1,736.80. December Comex silver was last down $0.239 at $22.46 an ounce.
The U.S. stock indexes are sharply lower at midday. There is keener risk aversion in the marketplace early this week. U.S. Treasury Secretary Janet Yellen warned today that a failure of the U.S. government to raise its debt limit would be "catastrophic," suggesting extreme market dislocations if such were to happen. That rhetoric helped to push U.S. stock indexes to daily lows. The U.S. government will technically run out of Monday at midnight Thursday. Fed Chairman Jerome Powell also spoke before a Senate committee today, but made no remarks that were significant to move the markets.
Rising bond yields have gotten the attention of traders and investors. The 10-year U.S. Treasury note yield is presently fetching 1.529% and at a three-month high. The major central banks of the world are preparing to wind down their easy-money policies of the past many years and that's bearish for bond prices.
Also of concern, European countries and China are experiencing serious energy shortages that are not expected to be resolved anytime soon. Nymex crude oil futures prices are lower today on mild profit taking after hitting $76.67 a barrel early on today. Meantime, natural gas futures prices are at a seven-year high. Rising energy prices heading into winter are sapping some trader and investor enthusiasm, especially in Europe, where some panic buying of gasoline is already occurring.
Technically, December gold futures bears have the firm 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 last week's high of $1,788.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,700.00. First resistance is seen at $1,750.00 and then at this week's high of $1,760.90. First support is seen at today's low of $1,727.80 and then at $1,715.00. Wyckoff's Market Rating: 3.0
December silver futures bears have the solid overall near-term technical advantage. Prices are in a three-week-old downtrend on the daily bar chart. Silver bulls' next upside price objective is closing 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 $21.00. First resistance is seen at this week's high of $22.865 and then at $23.00. Next support is seen at the September low of $22.025 and then at $21.75. Wyckoff's Market Rating: 1.0.
December N.Y. copper closed down 375 points at 425.20 cents today. Prices closed nearer the session low today. The copper bulls and bears are on a level overall near-term technical playing field. 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 this week's high of 431.75 cents and then at 435.00 cents. First support is seen at 420.00 cents and then at 415.00 cents. Wyckoff's Market Rating: 5.0.