Price pressure on gold, silver amid hawkish Fed, bearish charts
(Kitco News) - Gold and silver prices are down and hit four-week lows in early U.S. trading Monday. Bearish charts, a strong U.S. dollar, rising U.S. Treasury bond yields and a very hawkish Federal Reserve have the bears firmly controlling the precious metals markets at present. October gold futures were last down $10.30 at $1,730.00. September Comex silver futures were last down $0.336 at $18.41 an ounce.
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. Trader and investor risk appetite is still dented Monday, in the aftermath of the Federal Reserve’s highly anticipated Jackson Hole annual symposium that ended late last week. Fed Chairman Powell in a speech at the confab on Friday kept on script for an aggressively hawkish U.S. monetary policy, which ended some previous market talk of a more dovish “Fed pivot.” The CME’s FedWatch tool shows there is a 70% chance the Fed raises its Fed funds rate by 0.75% at its Sept. 20-21 FOMC meeting.
The U.S. data point of the week on this unofficial last week of summer is the August U.S. employment situation report from the Labor Department on Friday. The key non-farm payrolls growth number is forecast to come it up 325,000 in August versus the July report showing a gain of 528,000 non-farm jobs.
The key outside markets today see Nymex crude oil prices higher and trading around $94.00 a barrel. The U.S. dollar index is firmer in early U.S. trading. Meantime, the yield on the 10-year U.S. Treasury note is fetching 3.114%. The 2-year U.S. T-Note is yielding 3.47%, keeping the yield curve inverted and hinting of an impending U.S. and or global economic recession.
U.S. economic data due for release Monday includes the Texas manufacturing outlook survey.
Technically, the October gold futures bears have the solid overall near-term technical advantage. Prices are trending down again. 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 the overnight high of $1,740.60 and then at $1,750.00. First support is seen at the overnight low of $1,722.50 and then at $1,715.00. Wyckoff's Market Rating: 2.5.
September silver futures bears have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $20.00. The next downside price objective for the bears is closing prices below solid support at the July low of $18.01. First resistance is seen at the overnight high of $18.77 and then at $19.00. Next support is seen at the overnight low of $18.30 and then at $18.00. Wyckoff's Market Rating: 2.0.