Gold price steady-weak amid firmer USDX, U.S. stock indexes
(Kitco News) - Gold prices are steady to slightly lower in early U.S. trading Tuesday, giving up modest overnight gains as the U.S. dollar index has moved to its daily high and the U.S. stock indexes have done the same. December gold futures were last down $1.20 at $1,754.50. December Comex silver was last down $0.26 at $22.395 an ounce.
Global stock markets were mixed but mostly lower in overnight trading. The U.S. stock indexes are pointed to slightly higher openings when the New York day session begins. Traders and investors are still a bit nervous as mid-October nears. On the front burner today are concerns about energy supplies heading into the Northern Hemisphere's winter. Said Bloomberg in a morning email dispatch: Shortages of coal and natural gas heading into winter are expected to keep demand high. The latest pressure on energy supplies comes from record thermal coal prices in China as key mining regions are hit by flooding. The high cost of power is already feeding through to metal prices, with aluminum rising to the highest since July of 2008.
Rising inflation, due in part to the increasing energy prices, is also making the marketplace uneasy. U.S. inflation reports are due out Wednesday and Thursday mornings and will be closely scrutinized.
The troubled Chinese property Giant, Evergrande, reportedly missed another big debt payment and traders are increasingly worried about a contagion effect.
In other overnight news, Germany's closely watched ZEW economic conditions index for October was downbeat, showing a "current conditions” reading of 21.6 versus 31.9 in September.
The key outside markets today see the U.S. dollar index near steady. Nymex crude oil futures are slightly up after hitting a seven-year high Monday, and are trading around $80.75 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.598%.
U.S. economic data due for release Tuesday includes the NFIB small business index, the weekly Johnson Redbook and chain store sales reports. The International Monetary Fund world economic outlook is issued today.
Technically, December gold futures bears still have the slight overall near-term technical advantage. However, a four-week-old downtrend 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 the September low of $1,721.10. First resistance is seen at the overnight high of $1,765.60 and then at $1,771.50. First support is seen at $1,750.00 and then at last week's low of $1,745.40. Wyckoff's Market Rating: 4.5
The silver bears have the firm overall near-term technical advantage. 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 September low of $21.41. First resistance is seen at Monday's high of $22.83 and then at $23.00. Next support is seen at $22.25 and then at $22.00. Wyckoff's Market Rating: 2.5.