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Strong U.S. dollar, rising U.S. bond yields punishing gold, silver

Kitco Media
By Jim Wyckoff
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(Kitco News) - Gold and silver prices are lower again in early U.S. trading Wednesday, amid a strong U.S. dollar index and rising U.S. Treasury yields. Gold prices notched a three-week low. December gold was last down $18.70 at $1,637.30 and December silver was down $0.235 at $18.365.

Global stock markets were mixed overnight, with Asian shares mostly weaker and European shares mostly firmer. U.S. stock indexes are pointed to slightly higher openings when the New York day session begins. Risk appetite is more upbeat so far this week. U.S. corporate earnings reports are so far coming in better than expectations despite recession fears.

In overnight news, the Euro zone consumer price index report for September came in at up 9.9%, year-on-year, which was just slightly below market expectations.

Premiums for gold and silver bullion aren't dropping any time soon - LBMA

The key outside markets today see the U.S. dollar index solidly higher. Nymex crude oil prices are higher and trading around $84.00 a barrel. The U.S. Treasury 10-year note yield is presently fetching 4.065%.    

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, new residential construction, the weekly DOE liquid energy stocks report and the Federal Reserve’s beige book.

Live 24 hours gold chart [Kitco Inc.]

Technically, the December 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 the September low of $1,622.20. First resistance is seen at $1,650.00 and then at the overnight high of $1,659.80. First support is seen at $1,630.00 and then at $1,622.20. Wyckoff's Market Rating: 1.5

Live 24 hours silver chart [ Kitco Inc. ]

September silver futures bears have the solid overall near-term technical advantage and have momentum. 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 the September low of $17.40. First resistance is seen at the overnight high of $18.755 and then at $19.00. Next support is seen at this week’s low of $18.00 and then at $17.40. Wyckoff's Market Rating: 2.0.

Kitco Media

Jim Wyckoff

Jim Wyckoff has spent over 25 years involved with the stock, financial and commodity markets. He was a financial journalist with the FWN newswire service for many years, including stints as a reporter on the rough-and-tumble commodity futures trading floors in Chicago and New York. As a journalist, he has covered every futures market traded in the U.S., at one time or another.

Jim is the proprietor of the "Jim Wyckoff on the Markets" analytical, educational and trading advisory service. Jim also worked as a technical analyst for Dow Jones Newswires and as the senior market analyst with TraderPlanet.com. Jim is also a consultant with the highly respected "Pro Farmer" agricultural advisory service. Jim was also the head equities analyst at CapitalistEdge.com. He received his degree from Iowa State University in Ames, Iowa, where he studied journalism and economics.

Follow Jim daily on Kitco.com as he provides both AM and PM roundups and a daily Technical Special. 1 877 963-NEWS jwyckoff at kitco.com

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