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More price gains for gold, silver on safe-haven buying

Gold and silver prices are higher in early U.S. trading Wednesday, on more safe-haven demand amid the Israel-Hamas war that could well escalate in the near term. Notions of continued pause in Federal Reserve interest rate increases are also a bullish element for the metals markets. December gold was last up $9.80 at $1,885.10 and December silver was up $0.262 at $22.215.

Risk appetite is still not robust in the marketplace at mid-week, amid the Israeli-Hamas war that may well escalate in the coming weeks. However, the stock markets have not been seriously roiled, at least not yet. An explanation for this from one veteran market analyst: The Middle East has been turbulent for generations. While the weekend violence in Israel ranks among the worst in the region and is a terrible human tragedy, it is not something new.

Traders and investors have had to deal with Middle East instability and violence for decades. Also, as I reported Tuesday, at present the marketplace is apparently not factoring in a serious escalation in the Israel-Hamas war—namely other countries becoming significantly involved.

Traders and investors have also been somewhat assuaged this week by comments from some Federal Reserve officials that sounded less hawkish. Reads a Wall Street Journal headline today: “High bond yields likely to extend Fed’s pause.”

Asian and European stocks were mixed to higher overnight. U.S. stock indexes are pointed to slightly firmer openings when the New York day session begins.

Focus is also on key U.S. economic data today, including the producer price index report for September, which is seen coming in at up 0.3% from October, and compares to the 0.7% rise in the August report. Also due out today is the Federal Reserve’s FOMC minutes from its last meeting.

The key outside markets today see the U.S. dollar index near steady. Nymex crude oil prices are down and trading around $85.25 a barrel. The yield on the benchmark U.S. Treasury 10-year note yield is presently fetching 4.554%. Treasury yields have down-ticked this week on flight-to-quality buying amid the Middle East turmoil.

Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey. Several Federal Reserve officials are also slated to speak today.

Technically, the gold futures bears still have the firm overall near-term technical advantage. However, last Friday’s “outside day” up on the daily chart and then Monday’s gap-higher price move are early clues that a market bottom is in place. Prices are in a four-month-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $1,900.00.

Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at the overnight high of $1,888.40 and then at $1,900.00. First support is seen at the overnight low of $1,871.70 and then at this week’s low of $1,857.50. Wyckoff’s Market Rating: 2.5

Source: Kitco