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Price pressure on gold silver as U.S. bond yields march higher

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(Kitco News) - Gold and silver prices are lower in early U.S. trading Wednesday as rising U.S. Treasury yields continue to pull away investor demand for the safe-haven metals. The U.S. dollar index remains not far below its recent 20-year high and that’s also an underlying bearish element for the metals markets. December gold was last down $10.70 at $1,675.60 and December silver was down $0.332 at $19.15.

Traders are awaiting key U.S. inflation reports on Wednesday and Thursday mornings. The producer price index report for September is out Wednesday and the consumer price index report for September is out Thursday. The consumer price index is expected to come in at up 8.1%, year-on-year, following a rise of 8.3% in August.

Global stock markets were mixed to firmer overnight. U.S. stock indexes are pointed to higher openings when the New York day session begins. The marketplace remains less than “risk-on” at mid-week, following a downbeat assessment of the global economy by the International Monetary Fund on Tuesday.

The U.K. government bond market is still in turmoil, as the Bank of England this week was forced to buy inflation-linked bonds as part of its bond-buying program. The BOE today reiterated it will shut down its bond-buying program on Friday. There are worries U.K. pension funds could be lost if the U.K. bond market rout continues.

The key outside markets today see the U.S. dollar index just slightly weaker. Nymex crude oil prices are slightly higher and trading around $89.50 a barrel. The U.S. Treasury 10-year note yield is presently fetching 3.962%.   

Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey.

Live 24 hours gold chart [Kitco Inc.]

Technically, the December gold futures bears have the firm overall near-term technical advantage and have regained power. Bulls’ next upside price objective is to produce a close above solid resistance at the October high of $1,738.70. 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 Tuesday’s high of $1,691.30 and then at $1,700.00. First support is seen at this week’s low of $1,667.50 and then at $1,650.00. Wyckoff's Market Rating: 2.5.

Live 24 hours silver chart [ Kitco Inc. ]

September silver futures bears have the overall near-term technical advantage and have momentum. Silver bulls' next upside price objective is closing prices above solid technical resistance at the October high of $21.31. The next downside price objective for the bears is closing prices below solid support at $18.00. First resistance is seen at Tuesday’s high of $19.725 and then at $20.00. Next support is seen at $19.00 and then at $18.50. 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.