(Kitco News) - Gold and silver prices are sharply higher in midday U.S. trading Wednesday, with December gold hitting a new contract/record high of $4,072.40. Silver prices hit a 14-year high of $49.04 and is nearing its record high of just above $50.00. Safe-haven demand amid the U.S. government shutdown and other uncertain geopolitical matters are boosting the precious metals. December gold was last up $62.80 at $4,067.20. December silver prices were up $1.385 at $48.90.
The U.S. government shutdown is now the fourth-longest in modern history. Most federal government shutdowns last only hours or a few days. The current lapse is now the fourth-longest in modern history. One sign the government shutdown may not last much longer is U.S. air travel delays. Reports said the last government shutdown in late 2018-early 2019 was ended by air travel delays. Apparently, U.S. lawmakers on both sides of the aisle get spooked by angry U.S. travelers/voters. Bloomberg reported air traffic into and out of Chicago and Dallas was plagued by delays Tuesday night due to staffing shortages caused by the government shutdown, according to advisories from the Federal Aviation Administration. Delays at Dallas Fort Worth International Airport, a main hub for American Airlines Group Inc., reached an average of 30 minutes Tuesday. With the shutdown now a week old, air traffic controllers and other essential staff are still working — even though they won’t be paid until the impasse between Democrats and Republicans ends, and a resolution is reached.
In other news, another heavyweight, The Bank of England, says stock markets overvalued. Stretched valuations for artificial intelligence companies and challenges to the Federal Reserve’s independence have fueled the risks of a “sharp market correction,” the Bank of England said today, in its strongest warnings yet. In its quarterly financial stability update, the U.K. central bank said asset valuations have continued to rise and credit spreads tighten since its June review, despite “persistent material uncertainty around the global macroeconomic outlook.” Equity market valuations appear “stretched” with “technology companies focused on AI” particularly vulnerable, especially if “expectations around the impact of AI become less optimistic,” officials said, according to minutes of the Financial Policy Committee meeting held on Oct. 2 and reported by Bloomberg. The latest BOE report follows similar comments from other notables, including famed trader Paul Tudor Jones, who this week said the U.S. stock market may be entering a blow-off top phase.
The U.S. dollar index hit a nine-week high as Euro currency sinks amid French political crisis. The USDX has rallied sharply the past three weeks, hitting a nine-week high today, while the Euro currency sunk to a two-month low today, mostly due to a French political crisis that has the European Union and European markets on edge.
The greenback got an additional boost today as the New Zealand dollar tumbled to a six-month low after its central bank delivered a larger-than-expected interest-rate cut and signaled a willingness to ease its monetary policy further.
The other key outside markets today see crude oil prices firmer and trading around $62.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.1%.
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 $4,100.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,850.00. First resistance is seen at today’s record high of $4,072.40 and then at $4,100.00. First support is seen at the overnight low of $4,005.60 and then at $4,100.00. Wyckoff's Market Rating: 9.5.
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 $45.00. First resistance is seen at today’s high of $49.04 and then at $49.50. Next support is seen at $48.00 and then at the overnight low of $47.53. Wyckoff's Market Rating: 9.0
(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, Gold prices are sharply up in early U.S. trading Monday and hit another record high. Silver prices are also up and notched another 14-year high. The powerful but mature bull market runs in gold and silver are accelerating. That’s one early clue that from a time perspective, major market tops could come sooner rather than later. However, from a price perspective, there still could be much more room on the upside for gold and silver prices during this acceleration phase of the mature bull markets, before they peter out for a while. December gold was last up $40.80 at $3,815.90. December silver prices were up $0.361 at $44.575.
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