Higher USDX, bond yields, lower crude sink gold, silver

(Kitco News) - Gold and silver prices are down in midday U.S. trading Monday, with silver prices sharply lower. U.S. Treasury yields are on the rise and at multi-year highs, the U.S. dollar index hit a fresh 6.5-month high today and crude oil prices are lower. These are all bearish daily outside market influences on the precious metals markets. December gold was last down $9.30 at $1,936.50 and December silver was down $0.504 at $23.34.

The metals market bulls also have a still-hawkish Federal Reserve working against them.

Asian and European stocks were mixed to weaker overnight. U.S. stock indexes are mixed near midday. A Barron's headline today reads: "Shutdown, strikes, sticky inflation, and more…brace for a bumpy fourth quarter."

Traders and investors are in risk-off moods to start the trading week, amid the high potential for a U.S. government shutdown. The U.S. House and Senate return Tuesday after a long weekend in observance of Yom Kippur. The Senate will vote on a measure Tuesday to take up a short-term funding solution, called a continuing resolution.

In overnight news, China property developer Evergrande's stock plunged as much as 25% Monday after the developer said it cannot meet regulator conditions to issue new bonds as part of its planned restructuring of at least $30 billion of offshore debt, according to Bloomberg.

The gold and silver market bulls are frustrated their metals have not seen any notable safe-haven demand, despite several elements that are very worrisome to the marketplace. However, don't rule out some keener safe-haven buying in gold and silver if any of the worrisome elements, mentioned above, move from a simmer to a boil.

The key outside markets today see the U.S. dollar index solidly higher and at 6.5-month high. Nymex crude oil prices are lower and trading around $89.50 a barrel. The benchmark U.S. Treasury 10-year note yield is presently at a multi-year high and fetching 4.519%--the highest since 2007.

Technically, December gold futures bears have the firm overall near-term technical advantage. A four-month-old downtrend is in place on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at last week's high of $1,968.90. 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 today's high of $1,946.80 and then at $1,950.00. First support is seen at last week's low of $1,933.10 and then at the September low of $1,921.70. Wyckoff's Market Rating: 2.5.

December silver futures bears have the overall near-term technical advantage. However, there are solid technical support levels just below the market that begin to suggest a market bottom is in place. Silver bulls' next upside price objective is closing prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at the September low of $22.555. First resistance is seen at $23.75 and then at last week's high of $24.05. Next support is seen at last week's low of $23.06 and then at $23.00. Wyckoff's Market Rating: 4.0.

December N.Y. copper closed down 310 points at 366.50 cents today. Prices closed nearer the session low and closed at a four-month low close. The copper bears have the solid overall near-term technical advantage. Prices are in a choppy, seven-week-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 380.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the May low of 358.60 cents. First resistance is seen at today's high of 370.55 cents and then at 375.00 cents. First support is seen at the September low of 363.40 cents and then at 360.00 cents. Wyckoff's Market Rating: 2.5.

By

Jim Wyckoff

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