(Kitco News) - Gold and silver market bulls continue to be squelched by the strong U.S. dollar on the foreign exchange market and generally rising government bond market yields—both of which are pulling away consumer demand for the safe-haven metals. Lower crude oil prices early this week are also negative for the metals. December gold was last down $8.70 at $1,645.60 and December silver was down $0.379 at $18.81.
Global stock markets were mixed overnight but Asian shares were mostly down. U.S. stock indexes are headed for weaker openings when the New York day session begins. There are some early technical clues the U.S. stock indexes have put in market bottoms, including near-term price downtrends on the daily charts for the indexes being negated.
Veteran market watchers have taken keen note of Chinese President Xi Jinping's consolidation of his power at the recently concluded communist party meeting, including having aids drag a former party leader out of the confab meeting who was sitting right next to Xi. Asian stock markets have solid off significantly in the wake of Xi's power grab. Asian investors reckon Xi will move his second-largest global economy farther away from the West, and in the meantime continue strict Covid lockdowns that will further crimp the Chinese economy.
The Chinese yuan fell 0.6% against the U.S. dollar to CNY7.3084. The currency has now fallen 13% this year and the recent sell-off followed a 7% decline in the Hang Seng index. "Traders are losing faith in China following Xi's radical shake up at the National Congress. The leader used the meeting to fill the Politburo with loyal hardliners committed to zero Covid and unfriendly market policies," said broker SP Angel. China's central bank reacted to the yuan's weakness by moving the upper limit for cross-border financing, with the aim of boosting foreign capital inflows.
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| Yellen is monitoring 'potential vulnerabilities,' cites 'serious global headwinds', promises to improve Treasury market |
The key outside markets today see the U.S. dollar index slightly up. Nymex crude oil prices are lower and trading around $83.50 a barrel. The 10-year U.S. Treasury note is presently yielding 4.175%.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store sales indexes, the monthly house price index, the S&P Case-Shiller home indexes, the Richmond Fed business survey and the consumer confidence index.
![Live 24 hours gold chart [Kitco Inc.]](/images/live/gold.gif?0.2924175530478188){kind=small}
Technically, the 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 $1,600.00. First resistance is seen at today's high of $1,659.10 and then at this week's high of $1,675.50. First support is seen at today's low of $1,641.20 and then at $1,630.00. Wyckoff's Market Rating: 1.5
![Live 24 hours silver chart [ Kitco Inc. ]](/images/live/silver.gif)
The silver bears have the firm overall near-term technical advantage. However, recent price action suggests a market bottom is in place. 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 $19.00 and then at today's high of $19.36. Next support is seen at $18.60 and then at $18.00. Wyckoff's Market Rating: 2.5.
