Gold prices are trading around unchanged and silver prices are up a bit in early U.S. trading Tuesday. Both markets hit seven-week lows overnight. The two precious metals are in a downdraft amid a very strong U.S. dollar, rising U.S. Treasury yields, less demand for metals from China and less risk aversion in the general marketplace at present. December gold was last down $0.80 at $2,616.90 and December silver was up $0.152 at $30.765.
Asian and European stock indexes were mostly lower overnight. Asian markets are still feeling the bearish effects of recent China economic stimulus measures that have not met market expectations. Bloomberg reports China may provide more economic stimulus, bolster manufacturing and allow the Chinese yuan to weaken to offset the negative impacts of the upcoming Trump presidency and his tariff threats.
U.S. stock indexes are pointed to weaker openings when the New York day session begins. Said David Morrison of Trade Nation in an email dispatch today: “The current rally took off early last week and accelerated as it became clear that there would be a clean, timely and decisive result for the U.S. presidential election. The ’Trump Trade’ has also kicked in, affecting companies and sectors which are expected to thrive in an era of tax cuts and deregulation….
“However, there’s a dark cloud approaching as U.S. bond yields continue to hold at elevated levels. The Federal Reserve may have got the short end covered, to some extent, but investors decide what goes on further out. The recent pick-up in yields can suggest many things, including a strengthening U.S. economy which has no need of aggressive rate cuts, or fears of a renewed bout of inflation, given Trump’s promised tax cuts and tariffs, along with the prospect of trillions being added to the national debt,” said Morrison.
The key outside markets today see the U.S. dollar index higher again and at a 4.5-month high. Nymex crude oil futures prices are a bit firmer and trading around $68.50 a barrel. OPEC has just lowered its global oil demand forecast. The yield on the benchmark 10-year U.S. Treasury note is presently 4.361%.
The U.S. data points of the week are the consumer price index on Wednesday and the producer price index on Thursday. CPI for October is seen up 2.6%, year-on-year, compared to a reading of up 2.4% in the September report.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook retail sales report, the NFIB small business index, and the RCM TIPP economic optimism index.
Technically, December gold bulls have lost their overall near-term technical advantage and prices are trending down. Bulls’ next upside price objective is to produce a close above solid resistance at $2,700.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support $2,500.00. First resistance is seen at the overnight high of $2,633.40 and then at $2,650.00. First support is seen at $2,600.00 and then at the overnight low of $2,595.70. Wyckoff’s Market Rating: 5.0.
December silver futures bulls have lost the overall near-term technical advantage. Prices are trending down on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $32.50. The next downside price objective for the bears is closing prices below solid support at $29.00. First resistance is seen at $31.00 and then at this week’s high of $31.66. Next support is seen at the overnight low of $30.28 and then at $30.00. Wyckoff’s Market Rating: 5.0.
Source: Jim Wyckoff Kitco
