(Kitco News) - Gold prices are modestly down and silver prices are lower in early U.S. trading Tuesday. Routine profit taking is featured from the shorter-term futures traders after gold hit a record high and silver a 14-year high on Monday. Losses in the two precious metals are being limited by a potential U.S. government shutdown. December gold was last down $12.40 at $3,842.00. December silver prices were down $0.631 at $46.375.
The U.S. federal government is careening toward a shutdown at midnight, with Democrats and Republicans apparently not close to agreeing on a plan to fund federal operations and both sides blaming each other for the stalemate. Bloomberg said that “with just hours to go until a midnight deadline, the impasse over spending threatens to paralyze many U.S. government operations for only the 14th time in modern history, causing the suspension of services for Americans and paychecks for federal workers. Political fallout could be widespread for both President Donald Trump and Democrats ahead of next year’s critical midterm elections. Although last-minute spending deals have averted several other threatened shutdowns in recent years, the stakes are especially high now, with the White House threatening to fire employees rather than furlough them, and Democratic leaders under intense pressure from progressives in the party to stand up to Trump.” This situation has created some marketplace uncertainty and anxiety, which is bullish for the safe-haven gold and silver markets.
Global stocks were mixed overnight. U.S. stock indexes are pointed to weaker openings when the New York day session begins. Today is the last trading day of the month and of the quarter, which makes it an extra important trading day from a technical perspective.
The RatingDog China Manufacturing purchasing managers index (PMI) rose to 51.2 in September from August’s 50.5, surpassing forecasts of 50.3 and marking the highest reading since March. A reading above 50.0 suggests expansion in the sector. New orders growth hit a seven-month high and exports returned to expansion. Separately, official China figures showed factory activity shrank the least in six months, supported by hopes of fresh government support measures ahead of the October plenum.
The key outside markets today see the U.S. dollar index slightly down, while crude oil prices are lower and trading around $63.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.13%.
U.S. economic data due for release today includes the weekly Johnson Redbook retail sales report, the monthly house price index, the S&P Core Logic home indexes, the Chicago ISM business survey, and the jobs and labor turnover survey (JOLTS).
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 $4,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,700.00. First resistance is seen at $3,875.00 and then at this week’s high of $3,899.20. First support is seen at the overnight low of $3,820.60 and then at $3,800.00. Wyckoff's Market Rating: 8.5.
December silver futures bulls have the strong overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $50.00. The next downside price objective for the bears is closing prices below solid support at $44.00. First resistance is seen at $47.00 and then at this week’s high of $47.41. Next support is seen at the overnight low of $45.96 and then at $45.00. Wyckoff's Market Rating: 8.5.
(Hey! My “Markets Front Burner” weekly email report is my best writing and analysis, I think, because I get to look ahead at the marketplace and do some market price forecasting. Plus, I’ll throw in an educational feature to move you up the ladder of trading/investing success. And it’s free! Sign up here; it’s real easy. https://www.kitco.com/services
