(Kitco News) - Gold prices are modestly higher in early U.S. trading Thursday and not far below Wednesday’s record high. Silver prices are slightly down but still not far below Wednesday’s 14-year high. Steady safe-have bidding is keeping both precious metals elevated. December gold was last up $12.60 at $3,910.20. December silver prices were down $0.119 at $47.55.
The U.S. government shutdown is into its second day and the Trump administration is raising the stakes by halting $18 billion in infrastructure funding and signaling a willingness to fire thousands of federal workers. “The administration's moves have suggested a hardening of positions, which could require one side to make bigger concessions to get the federal government back to work, and some Republicans have expressed concerns that the strategy could backfire,” said a Bloomberg report. The shutdown could have significant economic impacts, with the Congressional Budget Office estimating a cost of $400 million per day in lost compensation, and some economists warning that mass firings could sap corporate confidence and reduce capital investments, said Bloomberg. The shutdown is prompting some risk aversion in some of the marketplace, even though the U.S. stock indexes hit record highs overnight.
Unsold Middle Eastern crude oil cargoes from the recently wrapped-up trading cycle are pointing to early signs that an expected global oil surplus could be starting, according to a Bloomberg report. The volume of unsold oil set to be loaded in November ranged from 6 million barrels to 12 million barrels, according to estimates from traders. Weaker-than-expected Chinese demand and OPEC+'s push to continue returning idled output are weighing on the market, traders said. As the monthly spot trading cycle ends, shipments are usually discounted to move them, and price-sensitive buyers in China and India are the typical purchasers. However, there’s no indication that these unsold cargoes have been snapped up yet, according to the traders.
The key outside markets today see the U.S. dollar index slightly down, while crude oil prices are weaker and trading around $61.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.11%.
U.S. economic data due for release today includes the Challenger job-cuts report. U.S. government reports are presently suspended.
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 $3,750.00. First resistance is seen at this week’s record high of $3,922.70 and then at $3,950.00. First support is seen at the overnight low of $3,877.00 and then at $3,850.00. Wyckoff's Market Rating: 9.0.
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 this week’s high of $47.975 and then at $48.50. Next support is seen at Wednesday’s low of $46.815 and then at this week’s low of $45.96. Wyckoff's Market Rating: 9.0.
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