(Kitco News) - Gold prices are moderately lower in early U.S. trading Wednesday, while silver prices are slightly up. Gold is seeing some profit-taking pressure and weak long liquidation from the shorter-term futures traders. Somewhat improved trader/investor risk appetite in the general marketplace at mid-week is also a negative for the safe-haven metals. December gold was last down $12.70 at $3,422.00. September silver prices were last up $0.057 at $37.88.
European and Asian stock markets were mostly higher in overnight trading. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins.
In overnight news, Bloomberg reports gold bullion stocks held in warehouses linked to the Shanghai Futures Exchange have jumped to an all-time high, a sign of resilient demand for gold in China. More than 36 tons of gold bars have been registered for delivery against futures contracts, with traders and banks taking advantage of a price gap between futures and physical gold. John Reade, senior market strategist at the World Gold Council, said "This shows how strong gold trading demand is in China right now" due to a surge in arbitrage activity triggered by heavy demand for futures. Traders and banks have moved to take advantage of the price gap, buying cheaper gold on the spot market and delivering it to the exchange’s warehouse. From there, it can be used to offset sales of futures, allowing them to close positions at a profit, said the Bloomberg report.
The key outside markets today see the U.S. dollar index weaker. Nymex crude oil futures are higher and trading around $66.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.236%.
U.S. economic data due for release Wednesday includes the MBA mortgage applications survey and the weekly DOE liquid energy stocks report.
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 $3,444.90 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 $38.00 and then at $38.50. 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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