(Kitco News) - Gold and silver prices are modestly lower in early U.S. trading Wednesday, pressured in part by good gains in the U.S. dollar index at mid-week, and by some profit taking from the shorter-term futures traders. December gold was last down $9.00 at $3,424.00. September silver prices were down $0.236 at $38.37.
Global stock markets were mixed to weaker overnight. U.S. stock indexes are pointed to slightly higher openings when the New York day session begins.
Veteran market watchers know that history shows September and October can be extra turbulent trading months for the stock and financial markets. As that timeframe approaches there may be an early warning coming from Hong Kong this week. Financial liquidity conditions in Hong Kong resumed tightening this week, with a key money-market rate climbing above a level that some analysts say may dent an economic recovery for Hong Kong. The benchmark one-month Hong Kong Interbank Offered Rate — or Hibor — jumped above the closely watched threshold of 3% Wednesday, reaching the highest since May. If the gauge remains above that level it could have a negative impact on the Hong Kong economy as investors would become more cautious, and borrowing demand would fall, Morgan Stanley analysts wrote in a note last week, as reported by Bloomberg.
The U.S. imposed a 50% tariff on Indian goods imported into the U.S. to punish the country for buying Russian oil, “upending a decades-long push by Washington to forge closer ties with New Delhi,” reported Bloomberg. The new tariffs will hit more than 55% of Indian goods shipped to the U.S. and hurt labor-intensive industries like textiles and jewelry the most, while key exports like electronics and pharmaceuticals are exempt. The tariffs threaten India's export competitiveness and raise questions about Prime Minister Narendra Modi's ambitions to transform the South Asian nation into a major manufacturing hub, with exporters bracing for falling orders and possible job cuts, said Bloomberg.
The European Union will seek to fast track legislation by the end of this week to remove all tariffs on U.S. industrial goods, a demand made by President Trump before the U.S. will lower its duties on the EU’s automobile exports, Bloomberg reports. The European Commission, which handles trade matters for the EU, will also give preferential tariff rates on certain seafood and agricultural goods, according to people familiar with the matter. The EU has conceded that the trade arrangement favors the U.S. but that the accord is necessary to give EU businesses stability and certainty. Commission President Ursula von der Leyen previously described it as “a strong, if not perfect deal.”
Nvidia Corp. delivers its quarterly earnings report after the closing bell today and options traders are betting that report will move the stock market. Activity in the stock options market suggests traders are preparing for a big impact when the world’s largest chipmaker gives an update on sales and profits from its artificial-intelligence products. Nvidia is the world’s most valuable company, at 8% of the S&P 500 Index by weighting.
The key outside markets today see the U.S. dollar index solidly higher and crude oil prices are slightly down and trading around $63.00 a barrel.
U.S. economic data due for release Wednesday includes the weekly 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 $3,500.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the July low of $3,319.20. First resistance is seen at the overnight high of $3,444.30 and then at $3,450.00. First support is seen at $3,400.00 and then at this week’s low of $3,396.10. Wyckoff's Market Rating: 6.5.
September silver futures bulls have the firm overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the July high of $39.91. The next downside price objective for the bears is closing prices below solid support at the July low of $36.28. First resistance is seen at last week’s high of $39.09 and then at $39.91. Next support is seen at $38.00 and then at $37.50. Wyckoff's Market Rating: 7.0.
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