(Kitco News) – Gold prices are slightly lower in early-afternoon U.S. trading Thursday and have visited both sides of unchanged in a choppy session. Global stock markets were lower today, suggesting a bit of risk aversion present in the marketplace. That’s bullish for the safe-haven metals. However, the recent strength of the U.S. dollar index continues to limit the upside in the metals. December gold futures were last down $1.20 an ounce at $1,201.60. December Comex silver was last down $0.08 at $14.59 an ounce.
World stock markets are being pressured late this week by rising world government bond yields and continued strong-greenback pressure on the secondary currency markets. U.S. Treasury yields saw the benchmark 10-year note yield rise to a seven-year high above 3.20% today. Strong U.S. economic data recently is driving U.S. bond and note prices lower. Other world government bond markets are also seeing their yields rise, in sympathy to the U.S. This is yet another clue that creeping price inflation could become problematic down the road. That’s a bullish scenario for hard assets like raw commodities, including the precious metals, and bearish for paper assets like stocks and bonds.
Traders are looking ahead to the U.S. Labor Department’s Employment Situation Report for September on Friday morning—arguably the most important U.S. data point of the month. The key non-farm payrolls number is expected to come in up 180,000. Wednesday’s U.S. ADP national employment report for September showed a gain of 230,000 jobs, which hints that Friday’s employment report will come in stronger than expected.
The key outside markets today find the U.S. dollar index firmer and hitting a six-week high, amid rising U.S. government bond yields that are attracting more foreign investors. Meantime, November Nymex crude oil prices are lower on some profit taking after hitting a four-year high earlier this week. Prices are trading just below $75.00 a barrel.
Technically, December gold futures prices closed nearer the session low today. Prices are back in the recent trading range, which suggests a market bottom is in place. The gold bears still have the overall near-term technical advantage. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,220.70. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at the August low of $1,167.10. First resistance is seen at this week’s high of $1,212.30 and then at $1,220.70. First support is seen at $1,200.00 and then at this week’s low of $1,188.10. Wyckoff’s Market Rating: 3.0
December silver futures prices closed nearer the session low. Prices are in a fledgling three-week-old uptrend on the daily bar chart. The silver bears still have the overall near-term technical advantage but recent price action suggests a market bottom being in place. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $15.07 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the September low of $13.965. First resistance is seen at today’s high of $14.805 and then at this week’s high of $14.95. Next support is seen at $14.50 and then at this week’s low of $14.395. Wyckoff’s Market Rating: 3.5.
December N.Y. copper closed down 480 points at 278.60 cents today. Prices closed nearer the session low and scored a bearish “outside day” down on the daily bar chart today. The copper bears have the overall near-term technical advantage. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at the 290.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the August low of 257.45 cents. First resistance is seen at 280.00 cents and then at 285.00 cents. First support is seen at this week’s low of 275.55 cents and then at 272.00 cents. Wyckoff’s Market Rating: 3.5.
By Jim Wyckoff
For Kitco News