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Gold price near steady on busy news day

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(Kitco News) - Gold prices are near steady in early U.S. trading Tuesday, while silver prices are firmer. Short covering in the futures markets is featured to start a holiday-shortened U.S. trading week. A strong U.S. dollar is a bearish outside market force working against the metals on this day. October gold was last down $0.80 at $1,712.60 and December silver was up $0.274 at $18.15.

Global stock markets were mixed but mostly firmer overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. It was a busy weekend of news for the marketplace, as U.S. market participants return from the three-day Labor Day holiday weekend.

The U.S. dollar index hit a fresh 20-year high Monday as the Euro currency slumped after Russia said it won't reopen its main natural gas pipeline from Russia into Europe.

Liz Truss became the new Prime Minister of the U.K.

OPEC-plus decided to cut its collective crude oil production by 100,000 barrels per day starting in October, in an effort to boost prices.

The Reserve Bank of Australia Tuesday raised its main interest rate by 50 basis points to 2.35%, its highest since early 2015. The Bank of Canada rate decision will be Wednesday and the European Central Bank meets Thursday. Many expect the ECB to raise its main interest rate by 75 basis points.


Platinum remains well supported even as surplus grows to 974k ounces – WPIC

And then there's the strict Covid lockdowns in China that have weakened the world's second-largest economy. China's central bank on Monday said it would ease monetary policy further by lowering the reserve requirement ratio for banks' foreign exchange reserves.

In a compelling news story from the Wall Street Journal, the publication reported today that "investors around the world are piling into U.S. stocks, even as they brace for the prospect of a rocky autumn, because they say there's nowhere better to shelter from the turbulence in global markets." Said one market analyst in the story: "The U.S. looks the least challenged in a very challenging world." If that story is accurate, what were considered "risk assets" (stocks) now being sought as a safe-haven asset globally could be significantly bearish for the gold, silver and U.S. Treasury markets, which have been considered safe-haven assets for a very long time.

The key outside markets today see Nymex crude oil prices near steady and trading around $87.00 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 3.242%.  

U.S. economic data due for release Tuesday includes the U.S. services PMI, the ISM report on business services, the global services PMI and the employment trends index report.

Live 24 hours gold chart [Kitco Inc.]

Technically, the October gold futures bears have the solid overall near-term technical advantage. Prices are trending down on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at $1,769.30. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the July low of $1,686.30. First resistance is seen at the overnight high of $1,727.00 and then at $1,740.00. First support is seen at the overnight low of $1,709.50 and then at $1,700.00. Wyckoff's Market Rating: 2.0

Live 24 hours silver chart [ Kitco Inc. ]

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 $19.385. The next downside price objective for the bears is closing prices below solid support at $17.00. First resistance is seen at the overnight high of $18.465 and then at $18.80. Next support is seen at the overnight low of $17.815 and then at $17.40. Wyckoff's Market Rating: 2.0.

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.