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Gold price rebounds on short covering, some safe-haven demand

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(Kitco News) - Gold and silver prices are higher in early U.S. trading Tuesday, on corrective price rebounds from recent selling pressure and on short covering from the shorter-term futures traders. A bit of safe-haven demand is also featured today, amid recent higher volatility in the currency markets. October gold was last up $13.80 at $1,637.50 and December silver was up $0.295 at $18.775.

Global stock markets were mixed to firmer overnight. U.S. stock indexes are pointed to higher openings when the New York day session begins, 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.

Federal Reserve Chairman Jerome Powell will speak later Tuesday alongside European Central Bank President Christine Lagarde.

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 $78.00 a barrel. The U.S. dollar index is lower on a corrective pullback 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.

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Meantime, the yield on the 10-year U.S. Treasury note is rising and presently fetching 3.821%. The 2-year Treasury note yield is 4.248%.

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store sales indexes, durable goods orders, the monthly house price index, the S&P Case-Shiller home indexes, the Richmond Fed business survey, the consumer confidence index and new residential sales.

Live 24 hours gold chart [Kitco Inc.]

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 this week's high of $1,646.40 and then at $1,652.00. First support is seen at $1,625.00 and then at this week's low of $1,618.40. Wyckoff's Market Rating: 1.5

Live 24 hours silver chart [ Kitco Inc. ]

September 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 the September low of $17.40. First resistance is seen at $19.00 and then at $19.40. Next support is seen at this week's low of $18.31 and then at the July low of $18.175. 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.