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(Kitco News) - Gold and silver prices are sharply down in morning U.S. trading early Tuesday. Amid a lack of major, fresh fundamental news so far this week, precious metals traders are focusing on the key outside markets that are all in bearish daily postures Tuesday. The U.S. dollar index is solidly higher, crude oil prices weaker and U.S. Treasury yields are up, with the 10-year note yield rising above 4.0%. December gold was last down $24.00 at $1,985.00 and September silver was down $0.497 at $24.47.
Asian and European stock markets were mixed in low-key overnight trading. U.S. stock indexes are mostly lower in late-morning action.
Trading may remain more subdued this week, ahead of the U.S. data point of the week on Friday: the U.S. employment situation report for July. The key non-farm payrolls number is expected to come in at up 200,000 jobs, compared to a rise of 209,000 in the June report.
In overnight news, the Euro zone July manufacturing purchasing managers index (PMI) came in at 42.7 versus the June reading of 43.4. The July reading was right in line with market expectations. A number below 50.0 suggests contraction in the sector.
In other news, the World Gold Council said global demand for gold fell 2% in the second quarter, to 921 metric tons, due to higher interest rates and a stronger U.S. economy that has kept the Federal Reserve hawkish this year. However, central bank demand for gold hit a record high in the first half of 2023, at 387 metric tons, said the WGC. If the central banks are indeed the so-called “smart money,” then the gold bulls should be assuaged by this news.
The Reserve Bank of Australia left its interest rates unchanged at its policy meeting Tuesday, but said further policy tightening may be required. The RBA said inflation is declining but is still too high.
The key outside markets today see the U.S. dollar index solidly higher and at a three-week high. Meantime, Nymex crude oil prices are weaker and trading around $81.25 a barrel. The benchmark 10-year U.S. Treasury note yield is presently fetching 4.033%.
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| A rise in U.S. money supply will drive gold, silver prices to new highs - Wells Fargo's John LaForge |
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook retail sales report, the U.S. manufacturing purchasing managers index (PMI), the ISM report on business manufacturing, construction spending, the global manufacturing PMI and domestic auto industry sales.
![Live 24 hours gold chart [Kitco Inc.]](/images/live/gold.gif?0.2924175530478188){kind=small}
Technically, the gold futures bulls and bears are on a level overall near-term technical playing field. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at the July high of $2,028.60. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the June low of $1,939.20. First resistance is seen at $2,000.00 and then at this week’s high of $2,010.90. First support is seen at last week’s low of $1,981.20 and then at $1,975.00. Wyckoff's Market Rating: 5.0
![Live 24 hours silver chart [ Kitco Inc. ]](/images/live/silver.gif)
The silver bulls have the slight overall near-term technical advantage. Silver bulls' next upside price objective is closing September futures prices above solid technical resistance at the July high of $25.475. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at the overnight high of $24.905 and then at $25.00. Next support is seen at last week’s low of $24.18 and then at $24.00. Wyckoff's Market Rating: 5.5.
