Gold, silver bounce as U.S. consumer confidence wilts
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(Kitco News) - Gold and silver futures prices are modestly up in midday U.S. trading Tuesday. Short covering is featured in the futures markets after a downbeat U.S. economic report this morning. December gold was last up $6.70 at $1,660.90 and December silver was up $0.126 at $19.325.
The gold and silver markets got an upside boost in the aftermath of a weaker-than-expected U.S. consumer confidence index report for October that helped drop in the U.S. dollar index to sharply lower levels and also pushed U.S. Treasury yields down. The downbeat consumer confidence index report may prompt the Federal Reserve to back off sooner on its aggressive U.S. monetary tightening.
Global stock markets were mixed overnight but Asian shares were mostly down. U.S. stock indexes are headed for weaker openings when the New York day session begins. There are some early technical clues the U.S. stock indexes have put in market bottoms, including near-term price downtrends on the daily charts for the indexes being negated.
Veteran market watchers have taken keen note of Chinese President Xi Jinping's consolidation of his power at the recently concluded communist party meeting, including having aids drag a former party leader out of the confab meeting who was sitting right next to Xi. Asian stock markets have solid off significantly in the wake of Xi's power grab. Asian investors reckon Xi will move his second-largest global economy farther away from the West, and in the meantime continue strict Covid lockdowns that will further crimp the Chinese economy.
The Chinese yuan fell 0.6% against the U.S. dollar to CNY7.3084. The currency has now fallen 13% this year and the recent sell-off followed a 7% decline in the Hang Seng index. “Traders are losing faith in China following Xi's radical shake up at the National Congress. The leader used the meeting to fill the Politburo with loyal hardliners committed to zero Covid and unfriendly market policies," said broker SP Angel. China's central bank reacted to the yuan's weakness by moving the upper limit for cross-border financing, with the aim of boosting foreign capital inflows.
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The key outside markets today see the U.S. dollar index slightly up. Nymex crude oil prices are lower and trading around $83.50 a barrel. The 10-year U.S. Treasury note is presently yielding 4.175%.
Technically, the gold futures bears have the solid overall near-term technical advantage. 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 $1,675.50 and then at $1,685.00. First support is seen at today's low of $1,641.20 and then at $1,630.00. Wyckoff's Market Rating: 1.5.
The silver bears have the firm overall near-term technical advantage. However, recent price action suggests a market bottom is in place. 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 $17.40. First resistance is seen at this week's high of $19.675 and then at $20.00. Next support is seen at $19.00 and then at $18.60. Wyckoff's Market Rating: 3.0.
December N.Y. copper closed down 230 points at 340.75 cents today. Prices closed nearer the session high today. The copper bears have the overall near-term technical advantage. 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 350.45 and then at the October high of 359.30 cents. First support is seen at last week's low of 330.30 cents and then at the October low of 324.30 cents. Wyckoff's Market Rating: 3.0.