(Kitco News) - Gold prices are lower in early U.S. trading Wednesday, on profit-taking and weak-long liquidation from the shorter-term futures traders. However, it appears a floor is under the market and bulls are looking to buy the dip at some point soon. There is still safe-haven demand as the Middle East crisis escalates. Silver prices are near steady. December gold was last down $20.20 at $2,670.10 and December silver was down $0.032 at $31.71.
Risk aversion is elevated at mid-week, following Iran’s launching of 180 missiles against Israel Tuesday. Israel has vowed retaliation. Reads and Associated Press headline today: “The war is spreading across the Middle East; the question now is: How much can it be contained?” The historically rocky month of October for the stock markets is starting out just as such.
The Bank of England today released a study that said a survey of its banks said a record number see geopolitics as top risk, which could cause “sharp corrections” in the stock markets and other markets.
Asian and European stock indexes were mixed overnight. China markets are closed for a holiday this week. U.S. stock indexes are pointed to lower openings when the New York day session begins, on follow-through selling from Tuesday’s solid losses.
The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are solidly higher and trading around $72.50 a barrel. Oil has been boosted by the Middle East flare-up. However, a DowJones Newswires report is headlined: “Oil demand concerns to cap price rally in longer term.” The benchmark 10-year U.S. Treasury note yield is on the decline and is presently fetching 3.749%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, and the weekly DOE liquid energy stocks report.
Technically, December gold bulls have the strong overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $2,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,600.00. First resistance is seen at the overnight high of $2,684.50 and then at this week’s high of $2,694.70. First support is seen at Tuesday’s low of $2,653.80 and then at this week’s low of $2,646.20. Wyckoff's Market Rating: 9.0.
December silver futures bulls have the firm overall near-term technical advantage. Prices are in a seven-week-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the May high of $33.50. The next downside price objective for the bears is closing prices below solid support at $30.00. First resistance is seen at $32.00 and then at $32.50. Next support is seen at this week’s low of $31.155 and then at $31.00. Wyckoff's Market Rating: 7.0.
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