Strong U.S. dollar, elevated bond yields strangling gold, silver
(Kitco News) - Gold and silver prices are down and near daily lows in midday U.S. trading Tuesday. U.S. Treasury yields are on the rise and near multi-year highs, while the U.S. dollar index today scored a 6.5-month high. Both are bearish outside market forces constricting the precious metals bulls. December gold was last down $15.10 at $1,921.50 and December silver was down $0.23 at $23.145.
U.S. stock indexes are solidly lower at midday. Traders and investors are in risk-off moods early this week, amid the high potential for a U.S. government shutdown this coming weekend. The Associated Press reports "there's no clear path ahead as lawmakers return with tensions high and options limited." The U.S. House is expected to vote Tuesday evening on a package of bills to fund parts of the government, but it's not clear that House Speaker McCarthy has the support needed to move ahead. Meanwhile, the U.S. Senate is preparing its own bipartisan plan for a stopgap measure to buy some time and keep offices funded past Saturday's deadline. "A government shutdown would disrupt the U.S. economy and the lives of millions of Americans," said the AP.
The gold and silver market bulls are so far perplexed their metals are seeing little to no safe-haven buying interest as stormy waters may lie just ahead for the marketplace. Still, don't rule out safe-have demand surfacing if the U.S. government shuts down amid labor strife and still-troublesome inflation impacting the U.S. economy.
|US government shutdown brings debt problems into focus, which is positive for gold - Invesco's Kristina Hooper|
The key outside markets today see the U.S. dollar index higher and hitting a 6.5-month high. Nymex crude oil prices are firmer and trading around $90.50 a barrel. The benchmark U.S. Treasury 10-year note yield is presently at a multi-year high and fetching 4.534%.
Technically, December gold futures bears have the solid overall near-term technical advantage. A five-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 $1,900.00. First resistance is seen at today's high of $1,935.50 and then at this week's high of $1,946.80. First support is seen at the August low of $1,913.60 and then at $1,900.00. Wyckoff's Market Rating: 2.0.
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 $22.00. First resistance is seen at $23.50 and then at $23.75. Next support is seen at $23.00 and then at the September low of $22.555. Wyckoff's Market Rating: 3.5.
December N.Y. copper closed down 265 points at 364.35 cents today. Prices closed nearer the session low and hit a four-month low. 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 368.35 cents and then at this week's high of 370.55 cents. First support is seen at today's low of 362.75 cents and then at 360.00 cents. Wyckoff's Market Rating: 2.0.