(Kitco News) - Gold prices are higher and hit another all-time high overnight, at $4,392.00, basis December Comex futures, but have since backed off the high. Silver prices are lower after overnight scoring a record high of $53.765. There is keener risk aversion in the general marketplace to end the week, which is driving even more safe-haven demand to the yellow metal. The regional U.S. banking sector is wobbly late this week. The silver bulls do appear to be at least near-term exhausted late this week. December gold was last up $18.70 at $4,321.10. December silver prices were down $0.726 at $52.425.
Global stock markets were lower overnight. U.S. stock indexes are pointed to solidly lower openings when the New York day session begins.
Bank, credit concerns rattle global stock, financial markets. The marketplace is extra anxious to end the trading week, on worries about bad bank loans at two regional U.S. banks, which have also raised concern about credit quality in the U.S. economy and further underscored the fragility of the $28 trillion bull market run in equities. U.S. bank stocks extended their slide in overnight trading, after a sharp selloff in regional lenders Thursday that reverberated through Asian and European trading hours. Investors are worried they haven’t identified where the risks lie, but some analysts believe the selloff will be short-lived and that regional banks remain well reserved for potential losses. However, Zions Bancorp and Western Alliance Bancorp have disclosed loan fraud losses, with Zions' subsidiary California Bank & Trust providing $60 million to the borrowers. The alleged culprits were investment funds tied to Andrew Stupin and Gerald Marcil, who "vehemently deny" the allegations through their attorney, according to a Bloomberg report. The disclosures led to a significant reaction from stock investors, with 74 of the biggest U.S. banks shedding more than $100 billion in market value this week. The disclosures add to other recent loan blowups, including subprime auto lender Tricolor Holdings, which filed for bankruptcy last month. That was followed by the collapse of auto-parts supplier First Brands Group, which owed more than $10 billion to some of the biggest names on Wall Street. Jamie Dimon, JPMorgan’s chief executive officer, said Tuesday, before the latest round of disclosures, that investors should be “forewarned” that more credit problems were likely to emerge. “When you see one cockroach, there are probably more,” Dimon said after his bank released third-quarter earnings and outlined its $170 million hit from Tricolor. “Everyone should be forewarned on this one.” Gold prices overnight hit another record high on safe-haven demand amid the spooked marketplace.
U.S. dollar having worst week in two months. The U.S. dollar index fell for a fourth day today, putting it on track for its biggest weekly drop in more than two months, amid dovish signals from Federal Reserve officials and the fresh worries over U.S. regional banks. U.S. Treasury two-year yields fell to a three-year low overnight. The benchmark 10-year U.S. Treasury note yield dipped below 4.0% today. Traders have boosted bets on Federal Reserve easing, and are now pricing 53 basis points of cuts by year-end versus 46 on Wednesday, according to a Bloomberg report. Fed Governor Christopher Waller said Thursday that Fed officials can keep lowering U.S. interest rates in quarter-percentage-point increments to support a faltering U.S. labor market. Fed Governor Stephen Miran, meanwhile, reiterated his view that a move twice that size would be appropriate later this month when the FOMC meets.
IMF says China-U.S. trade row poses significant global economic growth risks. The International Monetary Fund sees “significant downside risks” to global growth due to renewed trade frictions between the U.S. and China, the Fund’s Director of the Asia and Pacific Department, Krishna Srinivasan, said on Friday. After months of tentative stability in U.S.-China relations, tensions flared in recent weeks when Washington expanded tech restrictions and proposed tariffs on Chinese ships entering U.S. ports. China responded with similar actions, outlining tighter export controls on rare earths and other critical materials. “If these risks materialize in greater tariffs and disruption in supply chains, then growth could be lower by 0.3 points,” Srinivasan told Bloomberg TV’s Haslinda Amin on Friday. “If there are further tensions that would also mean downside risks for China.”
The key outside markets today see the U.S. dollar index weaker again. Crude oil prices are down a bit and trading around $57.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 3.94%.
Note: The gold market operates through two primary pricing mechanisms. The first is the spot market, which quotes prices for on-the-spot purchase and immediate delivery. The second is the futures market, which sets prices for delivery at a future date. Due to year-end positioning market liquidity, the December gold futures contract is currently the most actively traded on the CME.
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 $4,500.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $4,000.00. First resistance is seen at the overnight record high of $4,392.00 and then at $4,400.00. First support is seen at the overnight low of $4,291.30 and then at $4,250.00. 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 $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 the overnight record high of $53.765 and then at $54.00. Next support is seen at the overnight low of $52.25 and then at $52.00. Wyckoff's Market Rating: 8.5.
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