(Kitco News) – Gold prices are modestly higher in early U.S. trading Thursday, global stock markets were weaker overnight, suggesting a bit of risk aversion present in the marketplace. December gold futures were last up $1.70 an ounce at $1,204.60. December Comex silver was last up $0.04 at $14.71 an ounce.
World stock markets are pressured by rising world government bond yields and continued strong-greenback pressure on the secondary currency markets. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. Chinese markets are still closed this week for a public holiday but will reopen Friday.
A feature in the marketplace late this week is rising U.S. Treasury yields that 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, 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 overnight, amid rising U.S. government bond yields that are attracting more foreign investors. Meantime, November Nymex crude oil prices are near steady after hitting a four-year high Tuesday. Prices are trading just above $76.00 a barrel.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, and manufacturers’ shipments and inventories.
Technically, gold bears have the overall near-term technical advantage. However, prices are back in the middle of a trading range, which again suggests the metal has put in a market bottom. Gold bulls’ next upside near-term price breakout objective is to produce a close in December futures above solid 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 $1,218.00. 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 bears have the overall near-term technical advantage, but recent price action suggests a market bottom is in place. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $15.00 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 this week’s high of $14.95 and then at $15.00. Next support is seen at $14.50 and then at this week’s low of $14.395. Wyckoff’s Market Rating: 3.5.
By Jim Wyckoff
For Kitco News