Price pressure on gold, silver as USDX rallies, bond yields rise
(Kitco News) - Gold and silver prices are solidly lower in early U.S. trading Tuesday, as a strong U.S. dollar and rising U.S. Treasury yields have the metals market bulls running for cover today. December gold was last down $13.30 at $1,953.80 and December silver was down $0.617 at $23.94.
Trader and investor risk appetite is downbeat to start a U.S.-holiday-shortened trading week as China reported some more downbeat economic data. Its Caixin services purchasing managers index (PMI) came in at 51.8 is August versus 54.1 July and was below expectations of 53.5. The Caixin composite PMI was 51.7 versus 51.9 July.
Asian stock markets were mostly lower in overnight trading. U.S. stock indexes are pointed to lower openings when the New York day session begins. History shows the months of September and October can be rocky for the stock and financial markets.
Meantime, the Australia’s central bank kept its monetary policy unchanged but said further interest rate hikes may be necessary.
The key outside markets today see the U.S. dollar solidly up and at a six-month high. Nymex crude oil futures prices are a bit weaker and trading around $85.25 a barrel. The benchmark U.S. Treasury 10-year note yield is presently fetching around 4.22%.
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U.S. economic data due for release Tuesday includes the employment trends index, the IDB/TIPP economic optimism index, and manufacturers’ shipments and inventories.
Technically, the gold futures bears have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the August low of $1,913.60. First resistance is seen at the overnight high of $1,972.60 and then at last week’s high of $1,980.20. First support is seen at $1,950.00 and then at $1,940.10. Wyckoff's Market Rating: 3.5
The silver bulls have lost their overall near-term technical advantage after the sell offs on Friday and today. A price uptrend on the daily chart has been negated. Silver bulls' next upside price objective is closing December futures prices above solid technical resistance at the July high of $25.82. The next downside price objective for the bears is closing prices below solid support at the August low of $22.585. First resistance is seen at today’s high of $25.655 and then at $25.00. Next support is seen at today’s low of $23.815 and then at $23.50. Wyckoff's Market Rating: 5.0.