Gold, silver see slight price gains amid elevated risk aversion
(Kitco News) - Gold and silver prices are a bit higher in early U.S. trading Thursday morning. Heightened geopolitical concerns have prompted some slight safe-haven demand and are keeping the speculative bears on the sidelines late this week. However, a hawkish Federal Reserve is still squelching the metals market bulls. October gold was last up $2.80 at $1,668.60 and December silver was up $0.125 at $19.61.
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed to narrowly mixed openings when the New York day session begins. Risk aversion is still elevated late this week after Russian President Putin mobilized more troops to fight his war with Ukraine, and also implied he could use his nuclear weapons if Russia's integrity is threatened.
The marketplace is digesting this week's FOMC meeting that saw the U.S. Federal Reserve raise its main interest rate by 0.75%, which is what most expected. Fed Chairman Powell as his press conference after the FOMC statement was released Wednesday afternoon said it's likely the Fed will do two more 75 basis-point hikes this year. He also said a "soft landing" for the U.S. economy is not likely because the Fed must stamp out problematic price inflation. A Barron's news headline today reads, "The Fed signals more pain."
In overnight news, Japan's central bank intervened in the foreign exchange market for the first time in 24 years by buying the yen for U.S. dollars. The yen slumped when Japan's central bank said its interest rates would remain near zero for the next couple years.
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The key outside markets today see Nymex crude oil prices slightly higher and trading around $83.25 a barrel. The U.S. dollar index is higher and pushed to another 20-year high in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 3.54%. The 2-year Treasury note yield is 4.09%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, leading indicators, and the Kansas City Fed manufacturing survey.
Technically, the October gold futures bears have the solid overall near-term technical advantage. Prices are in a downtrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at $1,700.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,600.00. First resistance is seen at the overnight high of $1,673.00 and then at this week's high of $1,687.00. First support is seen at this week's low of $1,651.50 and then at $1,635.00. Wyckoff's Market Rating: 1.5
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 $20.00. The next downside price objective for the bears is closing prices below solid support at $18.00. First resistance is seen at the overnight high of $19.73 and then at $20.00. Next support is seen at the overnight low of $19.25 and then at $19.00. Wyckoff's Market Rating: 2.5.