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Gold price weaker amid bearish outside markets

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(Kitco News) - Gold and silver prices are modestly down in subdued early U.S. trading Tuesday. The precious metals are seeing mild selling pressure as the U.S. dollar index is trading higher, crude oil prices are weaker and as U.S. Treasury yields remain elevated on this day. December gold was last down $4.20 at $1,676.20 and December silver was down $0.034 at $20.88.

Global stock markets were mostly higher overnight. U.S. stock indexes are headed for slightly higher openings when the New York day session begins. The U.S. mid-term elections on Tuesday are a focus for the marketplace this week. Pollsters are predicting the Democrats will lose the House and may lose the Senate.

Interestingly, gold prices have risen 62% of the time over the six months following midterm U.S. elections, with a median return of 2%, according to a World Gold Council report using data going back to 1970.

Traders and investors are increasingly concerned about rising Covid cases in China, the world's second-largest economy. Reports said the number of new cases climbed above 7,500 Monday--the highest since May. Guangzhou, capital of Guangdong province and the nation's manufacturing hub, accounted for a third of the total cases. Broker SP Angel reports China is probably two years behind the West in its war with Covid infections. "While Chinese manufacturers gained market share in global markets when the West locked down, the nation now risks losing many overseas companies as the risk of ongoing lockdowns. Locking in workers risks their human rights."

The key outside markets today see the U.S. dollar index firmer. Nymex crude oil prices are weaker and trading around $90.50 a barrel. The 10-year U.S. Treasury note is yielding 4.201%.

Midterms are 'seasonally bullish' for markets; A Republican Congress would create beneficial 'deadlock' - Bill Baruch

The U.S. gets its next report card on the inflation fight Thursday, with the release of the consumer price index report for October, which is seen coming in up 7.9%, year-on-year, compared to the 8.2% rise seen in the September report.

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook retail and chain store sales indexes, the NFIB small business index, and the IDB/TIPP economic optimism index.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold futures bears have the overall near-term technical advantage. However, recent choppy and sideways price action suggests a market bottom is in place. 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 $1,686.40 and then at $1,700.00. First support is seen at the overnight low of $1,667.10 and then at $1,650.00. Wyckoff's Market Rating: 2.5

Live 24 hours silver chart [ Kitco Inc. ]

The silver bulls have the overall near-term technical advantage. A choppy, nine-week-old uptrend is in place on the daily bar chart. 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 $19.00. First resistance is seen at this week's high of $21.08 and then at $21.31. Next support is seen at this week's low of $20.435 and then at $20.00. Wyckoff's Market Rating: 6.0.

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.