(Kitco News) - Gold prices are higher in early U.S. trading Wednesday and scored new record highs. Silver prices are firmer and not far below Tuesday’s 14-year high. Safe-haven demand is featured in the two precious metals this week as the stock-and-financial-market-turbulent months of September and October are now at hand. December gold was last up $23.30 at $3,615.30. December silver prices were up $0.178 at $41.77.
Global stock markets were mixed to weaker overnight. U.S. stock indexes are pointed to firmer openings when the New York day session begins.
In overnight news, global bonds yields are on the rise (lower prices) mostly due to worries about inflation, government debt sales and fiscal discipline. U.S. Treasury yields have advanced, with the 30-year bond now approaching the 5% level, while yields on U.K., Australian and Japanese bonds are also increasing. The sell off reflects traders' concerns around heavy government spending and the potential inflationary fallout, with a Bloomberg gauge of global bond returns falling 0.4% on Tuesday. A deluge of corporate debt sales on Tuesday and uncertainty around the Federal Reserve’s independence are adding to the bond market pressures. Veteran market watchers know that history shows the months of September and October can be rough for the stock, financial and currency sectors—which in turn can negatively impact agricultural markets.
Eurozone industrial producer prices increased by 0.4%, month-over-month, in July, exceeding market forecasts of up 0.2% and following a 0.8% rise in June. The primary driver of this inflation was a 1.5% surge in energy costs, which followed a 3.3% increase the previous month. Additional upward pressure came from durable consumer goods, which rose by 0.2% (vs. 0.1%), and capital goods, which also increased by 0.1% (unchanged from June). Conversely, the prices of non-durable consumer goods were flat (vs. 0.1% in June), and intermediate goods prices declined for the third straight month, falling by 0.2%. On a year-over-year basis, producer price inflation eased to 0.2% in July from 0.6% in June, though it was still slightly above the consensus estimate of 0.1%.
Meanwhile, the China general services purchasing managers index (PMI) increased to 53.0 in August, up from 52.6 in July and above expectations of 52.5. The reading marked the fastest expansion in the services sector since May of 2024. New orders grew at the strongest pace since May of 2024, supported by a sharper rise in new export business, which increased at the fastest rate in six months. Backlogs of work rose at a faster pace, indicating increased pressure on operating capacity. On prices, input costs rose slightly, driven by higher wages and raw material prices. Meanwhile, selling prices declined, as firms reduced charges to support sales amid intense competition. Sentiment in China remained positive, with confidence unchanged from July, amid hopes that improved market conditions and internal growth plans would help stimulate business activity.
Chinese President Xi Jinping showcased his nation's military firepower at a parade alongside his allies, including Russian President Vladimir Putin and North Korea's leader, Kim Jong Un. The event was the first public appearance together for the three leaders, signaling their willingness to coordinate in challenging the U.S. Xi said China is determined to stand self-reliant and strong. The parade featured China's latest military hardware, with Xi vowing to speed up the building of a "world-class military" and "firmly safeguard" sovereignty and territorial integrity. Meanwhile, President Trump sent a pointed message on the Truth Social platform, accusing the three leaders of working against the U.S. “Please give my warmest regards to Vladimir Putin and Kim Jong Un, as you conspire against the United States of America,” Trump said in his post.
The key outside markets today see the U.S. dollar index slightly down, with crude oil prices lower and trading around $64.25 a barrel. The yield on the U.S. Treasury 10-year note is presently 4.289 percent.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the Fed’s beige book, factory orders, productivity and costs, the JOLTS job openings report. Minneapolis Fed President Neel Kashkari speaks, as was as St. Louis Fed President Alberto Musalem.
Technically, December gold futures bulls have the strong overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $3,700.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,500.00. First resistance is seen at $3,625.00 and then at $3,650.00. First support is seen at today’s low of $3,592.40 and then at $3,550.00. Wyckoff's Market Rating: 9.0.
December silver futures bulls have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $45.00. The next downside price objective for the bears is closing prices below solid support at $38.00. First resistance is seen at $42.00 and then at $42.50. Next support is seen at $41.00 and then at this week’s low of $40.555. Wyckoff's Market Rating: 8.5.
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