(Kitco News) – Gold prices are modestly higher in early U.S. trading Wednesday, after trading steady to weaker overnight. The yellow metal perked up a bit immediately following the release of a weaker-than-expected U.S. economic report. December gold futures were last up $3.10 an ounce at 1,486.60. December Comex silver prices were last down $0.089 at $17.295 an ounce.
The just-released September U.S. retail sales report showed a decline of 0.3%. Forecasts were calling for a gain of 0.2% from August. This report falls into the camp of the monetary policy doves who want to see further U.S. lowering of U.S. interest rates.
Asian and European stock markets were mixed but mostly weaker overnight. The U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. Hopes for a U.S.-China trade deal, called Phase 1, are somewhat dimming at mid-week, along with investor and trader risk appetites, following last week’s meetings between the world’s two largest economies. No deal was signed last week and specifics of the Phase 1 agreement are missing.
In overnight news, the Euro zone consumer price index for September was up 0.2% from August and up 0.8%, year-on-year. Those numbers were about in line with market expectations and continue to show major world economies not battling inflation, but instead battling deflation.
The International Monetary Fund on Tuesday released a report that forecast global economic growth at 3% in 2019, down from a 3.2% growth rate forecast by the IMF in July. The IMF blamed global trade disputes for the slowing economic growth worldwide.
A feature in the markets this week is the strong rally in the British pound, which hit a four-month high Tuesday on ideas of a Brexit deal forthcoming, to avoid a no-deal Brexit. However, no formal agreement has been reached yet between the U.K. and the European Union. The pound was under some pressure Wednesday.
Nymex crude oil prices are firmer and trading around $53.00 a barrel today. The other key “outside market” sees the U.S. dollar index near steady in early U.S. trading.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, retail sales, the NAHB housing market index, manufacturing and trade inventories, Treasury international capital data, and the Federal Reserve’s beige book.
Technically, the gold bulls have the overall near-term technical advantage bit are fading. A five-week-old downtrend line is in place on the daily bar chart and needs to be negated to give the bulls fresh technical strength. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $1,525.00. Bears’ next near-term downside price breakout objective is pushing December futures prices below solid technical support at the October low of $1,465.00. First resistance is seen at the overnight high of $1,489.60 and then at $1,500.00. First support is seen at last week’s low of $1,478.00 and then at $1,465.00. Wyckoff’s Market Rating: 6.0
December silver futures bulls have the slight overall near-term technical advantage but are fading and need to negate a five-week-old downtrend line in place on the daily bar chart to gain fresh power. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $18.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the October low of $16.94. First resistance is seen at the overnight high of $17.49 and then at this week’s high of $17.765. Next support is seen at $17.00 and then at $16.94. Wyckoff’s Market Rating: 5.5.
By Jim Wyckoff
For Kitco News
Contact jwyckoff@kitco.com
www.kitco.com
