(Kitco News) - Gold and silver prices are strongly lower and hit three-week lows in early U.S. trading, following a decisive win by Republican U.S. presidential candidate Donald Trump. The presidential race was not as close as expected and the process won’t be in dispute. So far, no civil unrest has occurred because of the election results. This is prompting the unwinding of safe-haven long-gold trades. A stronger greenback and higher Treasury yields today are also bearish for gold. December gold was last down $65.60 at $2,684.10 and December silver was down $1.43 at $31.345.
Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed to sharply higher openings when the New York day session begins, with the S&P 500 hitting a record high. The U.S. stock market has rallied strongly on the decisive victory by Republican U.S. presidential candidate Trump. The U.S. dollar index soared to its highest level since July, while U.S. Treasury yields surged. The benchmark 10-year U.S. Treasury note yield is presently fetching 4.4%. Reads a Barron’s headline today: “Trump’s win could stoke inflation, turning the Fed more hawkish.” The story said Trump’s promised trade tariffs “may lift inflation and create potential supply or demand shocks.”
The U.S. Senate has flipped to a Republican majority, while control of the U.S. House of Representatives is still up for grabs as election results are tallied.
Bitcoin prices soared by over $5,000 to a record high today on the Trump victory. Trump said during the campaign that he is an advocate of Bitcoin.
Overshadowed but also on tap this week is the FOMC meeting of the Federal Reserve. The meeting starts Wednesday morning and ends Thursday afternoon with the FOMC statement and press conference from Fed Chair Powell. Most believe the Fed will cut its main interest rate by 0.25%, especially after a weaker U.S. employment report released last Friday.
The other key outside market today sees Nymex crude oil futures prices lower and trading around $70.00 a barrel.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly DOE liquid energy stocks report and the global services purchasing managers index.
Technically, December gold bulls still have the firm overall near-term technical advantage but faded today. Bulls’ next upside price objective is to produce a close above solid resistance at the record high of $2,801.80. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the October low of $2,618.80. First resistance is seen at $2,700.00 and then at $2,708.70. First support is seen at $2,680.00 and then at $2,665.00. Wyckoff's Market Rating: 7.0.
December silver futures bulls still have the overall near-term technical advantage but have faded. A three-month-old uptrend on the daily bar chart is in jeopardy. Silver bulls' next upside price objective is closing prices above solid technical resistance at $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 $31.25 and then at $31.00. Wyckoff's Market Rating: 6.0.
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