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Gold price slide continues amid demand worries; FOMC minutes on deck

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(Kitco News) - Gold and silver prices are lower again in early U.S. trading Wednesday, amid worries about demand for precious metals following this week’s downbeat economic data coming out of China and still-heightened worries about a U.S. and/or global recession. A higher U.S. dollar index and rising U.S. Treasury bond yields on this day are also bearish outside market forces working against the metals market bulls. October gold futures were last down $8.70 at $1,770.80. September Comex silver futures were last down $0.315 at $19.765 an ounce.

Traders and investors will closely examine this afternoon’s minutes from the last meeting of the Federal Reserve’s Open Market Committee (FOMC). The marketplace will be looking for clues on the timing and degrees of upcoming monetary policy tightening from the U.S. central bank. Right now, the Fed funds futures market is putting nearly even odds on either a 0.5% or a 0.75% interest rate increase at the September FOMC meeting.

Global stock markets were mixed overnight, with Asian indexes mostly up and European indexes mostly down. U.S. stock indexes are pointed toward lower openings when the New York day session begins, on routine corrective pullbacks after hitting five-month highs on Tuesday. Corporate earnings reports are in focus this week.

Is gold's short squeeze over as hedge funds reluctant to make major bullish bets?

In overnight news, the U.K. got a hot inflation reading, as its July consumer price index was up 10.1%, year-on-year, following a rise of 9.4% in June.

The key outside markets today see Nymex crude oil prices higher and trading around $86.50 a barrel. The U.S. dollar index is higher in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 2.86%.

Live 24 hours gold chart [Kitco Inc.]

Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, retail sales, manufacturing and trade inventories and the weekly DOE liquid energy stocks report.  

Live 24 hours silver chart [ Kitco Inc. ]

Technically, the October gold futures bears have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the August high of $1,814.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,725.00. First resistance is seen at the overnight high of $1,786.30 and then at $1,800.00. First support is seen at the August low of $1,759.70 and then at $1,750.00. Wyckoff's Market Rating: 3.0

September silver futures bears have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $21.00. The next downside price objective for the bears is closing prices below solid support at $19.00. First resistance is seen at $20.00 and then at $20.25. Next support is seen at $19.47 and then at $19.25. Wyckoff's Market Rating: 3.0.

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.