Gold, silver powered higher by a bullish cocktail, including safe-haven demand
(Kitco News) - Gold and silver prices are sharply higher in midday U.S. trading Tuesday, with gold scoring a three-week high and silver a three-month high. Bulls showed important follow-through buying strength Tuesday, after Monday’s solid gains, to suggest still more upside for both metals in the near term. December gold was last up $32.40 at $1,734.60 and December silver was up $0.606 at $21.195.
Trading so far this week sees a sharply lower U.S. dollar index, rallying crude oil prices, falling U.S. Treasury yields and safe-haven demand—a fully fundamental bullish cocktail for the two precious metals. The near-term chart postures have also markedly improved for gold and silver.
Global stock markets were mostly firmer overnight. Markets in China and Hong Kong were closed for a holiday Tuesday. U.S. stock indexes are solidly higher at midday, on follow-through strength from the solid gains posted Monday. Risk appetite has at least temporarily up-ticked early this week, after weaker purchasing managers indexes (PMIs) from major economies, including the U.S., on Monday led to notions (probably premature) that the major central banks will start to decelerate their monetary policy tightening paces. Australia’s central bank on Tuesday raised its main interest rate by only 0.25%, following its last hike of 0.5%.
In a reminder of the global inflation problem, the Euro zone today reported its producer price index in August was up 43.3%, year-on-year, mainly due to soaring energy costs. However, excluding energy, the zone’s August PPI was still up 14.5% from last year.
|Global central banks increase reserves by 20 tonnes in August - World Gold Council|
The key outside markets today see the U.S. dollar index solidly lower on follow-through pressure from Monday’s losses. Nymex crude oil prices are higher and trading around $84.70 a barrel. Traders are awaiting an OPEC meeting on Wednesday that is expected to see the cartel cut its collective oil production by at least 1 million barrels a day, reports said. Meantime, the yield on the 10-year U.S. Treasury note is falling and presently fetching 3.6%. Last week the yield on the 10-year pushed very close to 4.0%.
The most important U.S. data point of the week, if not the month, is Friday’s employment situation report for September from the Labor Department. The key non-farm jobs number is expected to come in at up 275,000. The August report showed a non-farm jobs rise of 315,000.
Technically, December gold futures prices hit a three-week high again today. The gold futures bears still have the overall near-term technical advantage, but the bulls have momentum and it appears a near-term market bottom is in place. A six-week-old downtrend on the daily bar chart has been negated this week. Bulls’ next upside price objective is to produce a close above solid resistance at $1,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the September low of $1,622.20. First resistance is seen at $1,746.40 and then at $1,750.00. First support is seen at $1,725.00 and then at today’s low of $1,704.00. Wyckoff's Market Rating: 3.5
December silver futures prices hit a three-month high today. The silver bulls have the overall near-term technical advantage and have momentum. Silver bulls' next upside price objective is closing prices above solid technical resistance at $22.50. The next downside price objective for the bears is closing prices below solid support at $20.00. First resistance is seen at $21.50 and then at $22.00. Next support is seen at $21.00 and then at today’s low of $20.68. Wyckoff's Market Rating: 6.0.
December N.Y. copper closed up 920 points at 350.25 cents today. Prices closed near the session high again today and hit a two-week high. The copper bears have the overall near-term technical advantage. Prices are still in a five-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 360.00 cents and then at 365.00 cents. First support is seen at today’s low of 340.20 cents and then at this week’s low of 335.20 cents. Wyckoff's Market Rating: 3.0.