(Kitco News) - Gold prices are lower in early U.S. trading Tuesday, while silver prices are slightly up. Buying interest is being limited today by a firmer U.S. dollar index and lower crude oil prices on this day, amid a lack of other major fresh, markets-moving news. December gold was last down $20.50 at $3,405.90. September silver prices were last up $0.117 at $37.44.
European and Asian stock markets were mixed in overnight trading. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins.
In overnight news, China’s services activity unexpectedly grew in July to the fastest pace in over a year, indicating resilience in the sector during the summer travel season. The S&P China services purchasing managers’ index rose to 52.6 from 50.6 in June, marking the strongest expansion since May of 2024. The result beat the median forecast of 50.4 from economists surveyed by Bloomberg. Summer is typically a peak season for Chinese services such as tourism, transportation and entertainment. Increased travel and a more stable trade environment drove the fastest rise in export orders since February, the index suggested. Despite the improvement, it remains unclear if China’s sluggish consumer sentiment is improving. A central bank survey said Chinese citizens’ perception of the jobs market fell to the lowest level ever in the second quarter. Results of this private survey contrasted with the official PMI, which showed services activity weakened in July, with a gauge falling to 50.0 from 50.1 in June. A reading above 50.0 indicates expansion.
Nymex crude oil futures fell below $66 per barrel at one point overnight, marking a fourth straight session of losses. There are growing worries about a global supply glut following the OPEC-plus decision to increase oil output. Over the weekend, OPEC agreed to boost its collective production by 547,000 barrels per day in September, completing the reversal of a 2.2 million-barrel-per-day cut made by cartel member countries in 2023. The OPEC production cuts are trumping the specter of reduced Russian crude oil sales abroad due to tightened sanctions being threatened by the U.S., especially on Indian purchases of Russian oil.
Bloomberg today reports “a chorus of stock market prognosticators at some of Wall Street’s biggest firms is warning clients to prepare for a pullback as sky-high equity valuations slam into souring economic data.” Morgan Stanley, Deutsche Bank AG and Evercore ISI all warned the S&P 500 stock index is due for a near-term drop in the weeks and months ahead. These forecasts follow a strong stock-market rally from April’s lows that pushed prices to record highs last week. Morgan Stanley’s Mike Wilson sees a correction of up to 10% this quarter. Evercore’s Julian Emanuel expects a more substantial decline of as much as 15%. Deutsche Bank’s team, led by Parag Thatte, said a small drawdown in equities is overdue. History shows the months of September and October can be rocky for stock market investors.
The key outside markets today see the U.S. dollar index firmer. Nymex crude oil futures are lower and trading around $65.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.21%.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook retail sales report, the international trade report, the U.S. services PMI, the ISM report on business services, the RCM/TIPP economic optimism index and the global services PMI.
Technically, December gold futures bulls have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the July high of $3,509.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,300.00. First resistance is seen at this week’s high of $3,439.50 and then at $3,450.00. First support is seen at this week’s low of $3,397.90 and then at $3,350.00. Wyckoff's Market Rating: 6.5.
September silver futures bulls have the overall near-term technical advantage but are fading fast. A price uptrend on the daily bar chart has been negated. Silver bulls' next upside price objective is closing prices above solid technical resistance at this week’s high of $38.51. The next downside price objective for the bears is closing prices below solid support at $35.00. First resistance is seen at $37.73 and then at $38.00. Next support is seen at this week’s low of $36.76 and then at last week’s low of $36.28. Wyckoff's Market Rating: 6.0.
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