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Gold price up on safe-haven demand amid nervous marketplace

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(Kitco News) - Gold and silver prices are modestly higher in early U.S. trading Monday, as the precious metals are once again catching a bit of a safe-haven bid as the stock and financial markets remain very jittery. December gold was last up $4.90 at $1,676.80 and December silver was up $0.546 at $19.585.

The marketplace is still uneasy to start the month of October, which history shows can be rocky for the stock and financial markets. There are reports and rumors swirling Monday morning that investment bank Credit Suisse may be in financial trouble. Global stock markets were mostly lower overnight. Markets in mainland China were closed for a holiday. U.S. stock indexes are pointed to mixed openings when the New York day session begins.

Broker SP Angel this morning said in an email dispatch: “A global tightening of liquidity by central banks is hitting the credit sector, with signs of a credit crunch beginning to surface. A syndicate of banks including Barclays and Bank of America cancelled a $3.9 billion debt offering last week amid a lack of demand. Bloomberg reports a group of underwriters including Goldman Sachs, Bank of America and Credit Suisse took losses estimated at over $1 billion on a debt package to private equity firms amid higher yields and lower demand. Outflows in U.S. investment grade bonds hit their third largest outflow on record last week, following six weeks of withdrawals totaling $22.3 billion. Credit default swaps across major European banks have soared in September, with Credit Suisse's CEO noting the bank was facing a "critical moment."

Can gold price put an end to its six-month losing streak? Prices are at 'critical juncture' - analysts

In other overnight news, the U.K. government has scrapped a major part of its tax-cut plan after U.K. and European financial markets became roiled when it was announced. The markets were somewhat assuaged by pivot from the U.K. government.

The Euro zone September manufacturing purchasing managers index (PMI) came in at 48.4 versus 48.5 in August. A reading below 50.0 suggests contraction in the sector.

The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are sharply higher and trading around $82.80 a barrel. Traders are awaiting an OPEC cartel meeting on Wednesday and may cut production by 1 million barrels a day, reports said. Meantime, the yield on the 10-year U.S. Treasury note is rising and presently fetching 3.787%.  

U.S. economic data due for release Monday includes the U.S. manufacturing PMI, the global manufacturing PMI, the ISM report on business manufacturing, construction spending and domestic auto industry sales.

Live 24 hours gold chart [Kitco Inc.]

Technically, the December 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 last week's high of $1,684.40 and then at $1,700.00. First support is seen at $1,650.00 and then at $1,630.00. Wyckoff's Market Rating: 2.0

Live 24 hours silver chart [ Kitco Inc. ]

September silver futures bears have the overall near-term technical advantage but the bulls have gained some momentum. 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 $19.70 and then at $20.00. Next support is seen at $19.00 and then at $18.465. Wyckoff's Market Rating: 3.0.

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.