(Kitco News) - Gold prices are modestly higher and silver prices near steady in early U.S. trading Tuesday. December gold hit a record high of $4,190.90 overnight, while December silver futures notched an all-time high of $52.495. However, both markets are well down from their overnight highs, which is one very early clue that the bulls may now be near-term exhausted after the recent record-setting rallies. December gold was last up $18.90 at $4,151.80. December silver prices were up $0.016 at $50.38.
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed to solidly lower openings when the New York day session begins.
China on Tuesday sanctioned the U.S. units of a South Korean shipping giant and threatened further retaliatory measures on the industry, the latest in a series of tit-for-tat moves as the U.S. and China ratchet up their trade war. The sanctions, targeting five U.S. units of Hanwha Ocean Co., helped fuel a slump in global stock markets today as traders dialed back hopes for an easing of tensions between the world’s largest economies.
As the U.S. government shutdown is in its 14th day and amid the dearth of U.S. economic data, Federal Reserve Chairman Jerome Powell’s speech in Philadelphia today at the National Association for Business Economics (NABE) annual meeting will be monitored extra closely. He is scheduled to deliver a keynote speech on the U.S. economic outlook and monetary policy. The Fed is widely expected to deliver another quarter-point rate cut later this month, following a similar move in September, with another reduction anticipated in December.
As Nymex crude oil futures today dropped to a 4.5-month low of $57.68 a barrel, the International Energy Agency said a record oversupply of crude oil will be bigger than previously estimated and the excess is already starting to build up on ocean-going tankers. World oil supply will exceed demand by almost 4 million barrels a day next year, an unprecedented overhang in annual terms, according to the IEA's latest monthly report. The IEA lowered consumption growth estimates slightly for this year and boosted non-OPEC supply estimates for this year and next, as the OPEC-plus alliance continues to revive output. While crude oil inventories have swelled at a brisk clip of 1.9 million barrels a day this year, the impact on prices has been mitigated by China absorbing most of that supply, according to the IEA report. That’s beginning to change as a surge in Middle East exports pushes the volume of oil on the water to the highest level in years, the IEA said.
The other key outside markets today see the U.S. dollar index firmer. The yield on the benchmark 10-year U.S. Treasury note is presently 4.01%.
Technically, December gold futures bulls have the strong overall near-term technical advantage but may be getting near-term exhausted. Bulls’ next upside price objective is to produce a close above solid resistance at $4,300.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,900.00. First resistance is seen at the overnight record high of $4,190.00 and then at $4,200.00. First support is seen at the overnight low of $4,105.00 and then at $4,100.00. Wyckoff's Market Rating: 9.0.
December silver futures bulls have the solid overall near-term technical advantage but now appear exhausted. Silver bulls' next upside price objective is closing prices above solid technical resistance at $55.00. The next downside price objective for the bears is closing prices below solid support at last week’s low of $46.70. First resistance is seen at $51.00 and then at $52.00. Next support is seen at $50.00 and then at the overnight low of $48.75. 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
