Gold Holding Slight Gains After Batch Of U.S. Data

(Kitco News) – Gold prices are modestly higher in early U.S. trading Thursday, following several U.S. economic reports that were a mixed bag. The precious metals bulls are impressed their markets are able to post modest gains in the face of a stronger U.S. dollar index. Gold and silver are seeing a bit of support as the U.S. stock indexes have backed down from overnight gains and are now poised to open the U.S. day session on the downside.December gold futures were last up $2.90 an ounce at $1,213.00. December Comex silver was last up $0.07 at $14.15 an ounce.

Global stock markets were mixed overnight. Any stronger stock market selling pressure surfacing today would likely more significantly benefit gold and silver prices.

In overnight news, U.K. Prime Minister Theresa May had two of her cabinet members resign Thursday, including her Brexit secretary, following May’s pronouncement Wednesday that she is sticking with her controversial Brexit plan. The British pound sunk on the news of the resignations, while European bond yields rose. There is now talk May could see Parliament move to a no confidence vote. Gold may be seeing some limited safe-haven buying interest from this matter. However, the situation is not a serious geopolitical factor for the world marketplace.

The U.S. dollar index is trading solidly higher today and not far below this week’s 1.5-year high. The strong U.S. economy compared to most other world economies, and the interest rate differentials in those economies that see U.S. rates significantly higher, are bullish underlying elements that are likely to continue to provide strong support for the greenback.

The marketplace took note of U.S. Federal Reserve Chairman Jerome Powell’s comments at a speech late Wednesday that the Fed is closely monitoring the modest deceleration in world economic growth. However, Powell implied that situation is not now altering the Fed’s monetary policy tenor of continuing to slowly raise U.S. interest rates. Powell added that a further U.S. stock market sell off could impact the Fed’s policy decisions.

Traders and investors are also keeping a close eye out for new developments on the U.S.-China trade war front. Reports this week say there has been movement on China’s part to better communicate with the U.S. regarding getting formal discussions under way. Most believe the G20 meetings in Argentina later this month will see U.S. President Trump and Chinese Premiere Xi meet face-to-face on the matter.

The big drop in crude oil prices the past six weeks has the world marketplace very uneasy. Nymex crude oil futures prices are slightly lower today, trading near $56.00, after dropping to an 11-month low of $54.75 a barrel on Tuesday. In less than six weeks’ time Nymex crude prices have dropped by over $20 a barrel. The steep slide in oil prices is a bearish element for most of the raw commodity sector, including the precious metals, as oil is arguably the leader of that sector.

U.S. economic data due for release Thursday includes the weekly jobless claims report, import and export prices, retail sales, the Empire State manufacturing survey, the Philadelphia Fed business survey, the weekly DOE liquid energy stocks report, and manufacturers’ trade, inventory and sales.

Technically, gold bears have the overall near-term technical advantage amid a fledgling downtrend in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $1,225.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at the September low of $1,184.30. First resistance is seen at Wednesday’s high of $1,217.20 and then at $1,220.00. First support is seen at $1,200.00 and then at this week’s low of $1,196.60. Wyckoff’s Market Rating: 3.0

December silver futures bears have the solid overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $14.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $13.50. First resistance is seen at $14.25 and then at $14.425. Next support is seen at this week’s low of $13.86 and then at $13.75. Wyckoff’s Market Rating: 1.5.

By Jim Wyckoff
For Kitco News


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