(Kitco News) - Gold prices are modestly up and silver prices near steady in early U.S. trading Wednesday. Some safe-haven demand has surfaced at mid-week as the global stock markets are still a bit shaky amid ideas U.S. stocks are overvalued and that there is an AI stock bubble. December gold was last up $12.70 at $3,972.90. December silver prices were down $0.011 at $47.285.
Global stock markets were mixed to weaker overnight. U.S. stock indexes are set to open slightly lower in New York trading.
In overnight news, Cambodia is set to become one of the first countries to store gold with China, according to people familiar with the matter, marking early progress in Beijing’s push to develop as a global bullion hub, reports Bloomberg. The Southeast Asian nation is planning to store some of its reserves in a vault registered with the Shanghai Gold Exchange in Shenzhen’s bonded zone, the people said, requesting anonymity because the matter is sensitive. A few other countries have also expressed interest, they said, as they weigh the benefits of diversifying their reserves from traditional hubs like London.
U.S. government shutdown now the longest in history… The U.S. government shutdown has become the longest in history, and with no sign of a resolution soon its economic toll is deepening. Now in its 36th day, the federal government shutdown has surpassed the previous record set in early 2019 during President Trump’s first term. Every week that passes costs the economy anywhere from $10 billion to $30 billion, based on analysts’ estimates, with several landing in the $15 billion range. Depending on its length, the shutdown could lower fourth-quarter U.S. economic growth by as much as 2 percentage points, according to the Congressional Budget Office. If the stalemate extends to Thanksgiving week, about $14 billion won’t be recovered at all, the CBO said and as reported by Bloomberg.
ADP jobs report in focus today… ADP Research’s private-sector payrolls report ahead of the U.S. open today may have a bigger impact than usual on sentiment, due to limited visibility on the labor market amid the longest U.S. government shutdown on record. The figures are projected to show a modest increase in October after declines the prior two months, according to Bloomberg. With money markets pricing in around a 70% change of a Fed rate cut in December as officials look to support the labor market, an unexpected surprise may prompt a recalibration of expectations. “If the ADP shows a significant decline, then Fed rate cut discussion will gain new momentum, which might be supportive for the stock market,” said Christian Stocker, a strategist at UniCredit SpA and as reported by Bloomberg.
Democrats score U.S. election victories Tuesday… U.S. Democrats registered their biggest political victories since their stinging loss to President Trump a year ago with a series of wins Tuesday night in Virginia, New Jersey, New York and California. Democrats Mikie Sherrill in New Jersey and Abigail Spanberger in Virginia both campaigned for governor on pocketbook issues — lowering costs and expanding childcare. In New York City, Zohran Mamdani, a Democrat who ran a campaign for mayor, won Tuesday after emphasizing the same message on the cost of living — tackling housing costs and widening inequality in the nation’s financial capital. In California, voters approved a ballot initiative that will redraw the state’s congressional district map to give Democrats the opportunity to win a handful of additional seats. Democrats also won competitive down-ballot races in Pennsylvania, where three Supreme Court justices won retention elections, and in Georgia, where two Democrats won seats on the state utility commission by campaigning on energy costs.
The key outside markets today see the U.S. dollar index down a bit. Crude oil prices are weaker and trading around $60.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.08%.
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’ 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 $3,800.00. First resistance is seen at $4,000.00 and then at this week’s high of $4,043.10. First support is seen at the overnight low of $3,935.70 and then at $3,900.00. Wyckoff's Market Rating: 6.0.
December silver futures 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 $48.00 and then at $48.50. Next support is seen at the overnight low of $46.52 and then at $46.00. Wyckoff's Market Rating: 6.0.
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