(Kitco News) – Gold prices are modestly down in early U.S. trading Monday, on a normal corrective pullback that saw prices hit a more-than-three-month high on Friday. A firmer U.S. dollar index to start the trading week is also working against the precious metals market bulls. December gold futures were last down $3.50 an ounce at $1,232.30. December Comex silver was last up $0.015 at $14.72 an ounce.
Global stock markets were mixed to mostly firmer overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. European stock indexes were mostly up, following news that the S&P Global Ratings agency on Friday did not downgrade Italy’s debt rating. China’s stock market suffered more losses Monday amid investor worries about the world’s second-largest economy.
U.S. stock indexes on Friday fell to six-month lows before posting rebounds on the day. Stock market bulls will be glad to get the historically turbulent month of October out of the say and hopefully get a “Santa Claus rally” this year. More stock market volatility on the downside in the near term would benefit safe-haven gold.
In overnight news, German Chancellor Angela Merkel has announced she will step down as leader of her Christian Democratic party. Europe market watchers say that’s a sign of Merkel’s decline in power in Germany and in the European Union.
The key outside markets today find the U.S. dollar index higher and hovering near Friday’s nine-week high. Meantime, November Nymex crude oil prices are weaker and trading around $67.50 a barrel.
The key U.S. economic data point of the week, if not the month, will be Friday’s November employment report from the Labor Department.
U.S. economic data due for release Monday includes personal income and outlays and the Texas manufacturing outlook survey.
Technically, gold bulls have the near-term technical advantage. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $1,275.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,220.00. First resistance is seen at the overnight high of $1,237.60 and then at last week’s high of $1,246.00. First support is seen at $1,225.00 and then at $1,220.00. Wyckoff’s Market Rating: 6.0
December silver futures bears still have the overall near-term technical advantage. 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 last week’s high of $14.84 and then at the October high of $14.95. Next support is seen at last week’s low of $14.54 and then at the October low of $14.255. Wyckoff’s Market Rating: 4.0.
By Jim Wyckoff
For Kitco News