(Kitco News) - Gold and silver prices are weaker in midday U.S. trading Monday. The recent lack of fresh, bullish fundamental news for the safe-haven metals has the bulls timid, especially with gold and silver prices still at historically elevated levels. Precious metals traders are looking forward to a week in which U.S. government economic data will start to flow again. December gold was last down $30.50 at $4,063.80. December silver prices were down $0.231 at $50.45.
The U.S. Bureau of Labor Statistics has announced it will release the September U.S. jobs report this Thursday, Nov. 20, after it was delayed due to the U.S. government shutdown. The BLS will also issue September inflation-adjusted earnings Friday, Nov. 21, and the reports will come out at 7:30 a.m. CST. The new data will help shed light on the state of the U.S. economy, though the data will be more backward-looking than usual.
I pointed this out in my Kitco A.M. Roundup but it bears repeating, especially as Steve Liesman of CNBC today came on with a report alerting of some signs of credit market stresses:
Noted big bond trader: stock, financial markets troubles are brewing. In markets awash in “garbage lending” and unhealthy valuations, Jeffrey Gundlach is keeping his strategy simple: load up on cash and stay away from private credit, Bloomberg reports. “One of Wall Street’s bond kings is spotting overpriced assets almost everywhere he looks…. Gundlach called out nosebleed valuations in the equity market and warned investors against ‘incredibly speculative’ bets,” said the report. The DoubleLine Capital founder recommends a 20% cash position to hedge against a market implosion — one he sees brewing in unsafe lending to private companies and overblown hopes for artificial intelligence. “The health of the equity market in the United States, it’s among the least healthy in my entire career,” Gundlach said. “The market is incredibly speculative, and speculative markets always go to insanely high levels. It happens every time.” The veteran debt investor is concerned the $1.7 trillion private credit market is engaging in “garbage lending” that could tip global markets into their next meltdown. “The next big crisis in the financial markets is going to be private credit,” he said. “It has the same trappings as subprime mortgage repackaging had back in 2006,” Gundlach said and as reported by Bloomberg.
Any serious stock/financial markets turbulence and dislocations would likely see safe-haven demand for gold—even if such might be a delayed reaction from traders.
The key outside markets today see the U.S. dollar index slightly higher. Crude oil prices are near steady and trading around $60.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.125%.
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 the record high of $4,398.00. 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 high of $4,107.60 and then at $4,150.00. First support is seen at the overnight low of $4,051.10 and then at Friday’s low of $4,032.60. Wyckoff's Market Rating: 7.0.
December silver futures bulls have the solid overall near-term technical advantage and their next upside price objective is closing prices above solid technical resistance at last week’s record high of $54.415. The next downside price objective for the bears is closing prices below solid support at $50.00. First resistance is seen at today’s high of $51.11 and then at $51.50. Next support is seen at $50.00 and then at last week’s low of $49.86. Wyckoff's Market Rating: 7.5.
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