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Gold holding modest gains on short-covering bounce, mild safe-haven buying

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(Kitco News) - Gold prices are a bit firmer in midday U.S. trading Tuesday, but down from the daily highs as the U.S. dollar index has recovered its early losses and U.S. Treasury yields are on the rise again. Short covering from the shorter-term futures traders is featured today, along with a bit of safe-haven demand, amid recent higher volatility in the currency markets and a wobbly U.S. stock market. October gold was last up $5.10 at $1,628.50 and December silver was down $0.05 at $18.43.

Global stock markets were mixed to firmer overnight. U.S. stock indexes are mixed at midday but down from daily highs, on corrective bounces from recent solid losses. The Dow Jones Industrial Average on Monday slipped into bear market territory, which is defined by a drop of 20% or more from the recent high.

The key outside markets today see Nymex crude oil prices firmer on a corrective rebound after hitting a seven-month low Monday and are trading around $77.50 a barrel. The U.S. dollar index is near steady after hitting a 20-year high Monday. Mike Wilson, Morgan Stanley’s noted market analyst, said the rise of the greenback has created an “untenable situation” for risk assets around the globe and that the risk for a financial market crisis is elevated. Watch the currency markets extra closely in the next few weeks. Gold could catch a better safe-haven bid if the currency markets continue to be highly volatile, including the potential for spreading into a general marketplace contagion.


Investors should be overweight commodities and half of that in gold - abrdn's Minter

Meantime, the yield on the 10-year U.S. Treasury note is rising and presently fetching 3.959%. The 2-year Treasury note yield is 4.30%.

Live 24 hours gold chart [Kitco Inc.]

Technically, October gold futures prices hit a nearly 2.5-year low Monday. The gold futures bears have the solid overall near-term technical advantage. Prices are in a six-week-old 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 this week’s high of $1,646.40 and then at $1,652.00. First support is seen at this week’s low of $1,624.40 and then at $1,615.00. Wyckoff's Market Rating: 1.0.

Live 24 hours silver chart [ Kitco Inc. ]

December silver futures bears have the firm 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 this week’s high of $19.045 and then at $19.40. Next support is seen at this week’s low of $18.31 and then at $18.00. Wyckoff's Market Rating: 2.0.

December N.Y. copper closed down 10 points at 329.30 cents today. Prices closed nearer the session low today. The copper bears have the firm overall near-term technical advantage. Prices are in a four-week-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the September high of 369.25 cents. The next downside price objective for the bears is closing prices below solid technical support at the July low of 315.55 cents. First resistance is seen at this week’s high of 336.45 cents and then at 340.00 cents. First support is seen at 325.00 cents and then at 315.55 cents. 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.