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Gold price up following weaker-than-expected U.S. GDP growth

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(Kitco News) - Gold prices are moderately higher in early U.S. trading Thursday, in the wake of a U.S. GDP report that was downbeat and which fell into the camp of the U.S. monetary policy doves, who want the Federal Reserve to hold off on tapering its monetary policy stimulus. Silver prices are trading near steady in early U.S. dealings. December gold was last up $4.40 at $1,803.00 and December Comex silver was last down $0.066 at $24.12 an ounce.

The just-released U.S. data point of the day saw the advance estimate for third-quarter gross domestic product come in at up 2.0%, compared to expectations of up 2.8%, year-on-year and a 6.7% growth reading in the second quarter. The closely watched PCE price index was reported at up 5.3%, compared to a rise of 6.5% in the second quarter. The weaker GDP data was somewhat offset by the weekly U.S. jobless claims report that showed a decline.

Global stock markets were mostly weaker in overnight trading. The U.S. stock indexes are pointed to slightly higher openings when the New York day session begins. Trader and investor attitudes are upbeat this week, as they choose to focus on positive corporate earnings reports. For the moment the marketplace is brushing aside slowing economic growth in China, supply chain bottlenecks and rising inflation prospects.

The European Central Bank held its regular monetary policy meeting Thursday. No changes in ECB monetary policy were implemented and not were expected. The ECB did say that its bond-buying program would continue until at least March of 2022. In her press conference ECB President Christine Lagarde was expected to say the Euro zone remains too weak for policy makers to pull back stimulus. Meantime, Canada’s central bank on Wednesday ended its quantitative easing program.

The World Gold Council reported gold demand in the third quarter declined 7% compared to Q3 2020. Outflows from gold-backed ETFs were the primary factor. Increasing jewelry demand did mitigate the slide in demand, said the WGC. Gold jewelry demand grew 33%, year-on-year. Meantime, central banks purchased 69 metric tons for reserves vs 10 MT in same period in 2020.

The key outside markets today see the U.S. dollar index slightly higher. Crude oil prices are lower and trading around $81.65 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.556%.  

Other U.S. economic data due for release Thursday includes pending home sales and the Kansas City Fed manufacturing survey.

Live 24 hours gold chart [Kitco Inc.]

Technically, December gold futures bulls have the overall near-term technical advantage as prices are in a four-week-old uptrend on the daily chart. Bulls’ next upside price objective is to produce a close above solid resistance at the September high of $1,836.90. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,750.00. First resistance is seen at this week’s high of $1,811.50 and then at the October high of $1,815.50. First support is seen at today’s low of $1,795.60 and then at this week’s low of $1,783.00. Wyckoff's Market Rating: 6.5

Live 24 hours silver chart [ Kitco Inc. ]

The silver bulls have the overall near-term technical advantage. Prices are in a four-week-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing December futures prices above solid technical resistance at $25.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at Wednesday’s high of $24.33 and then at this week’s high of $24.695. Next support is seen at this week’s low of $23.905 and then at $23.615. Wyckoff's Market Rating: 6.0.

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.