(Kitco News) – Safe-haven gold prices are posting double-digit gains in early-afternoon U.S. trading Thursday, on safe-haven demand amid reports the world’s two largest economies are not close to a trade deal, and after a weaker-than-expected U.S. economic report. A wobbly U.S. dollar index recently is also working in favor of the precious metals market bulls. December gold futures were last up $14.60 an ounce at 1,511.30. December Comex silver prices were last up $0.138 at $18.005 an ounce.
Worldwide risk appetite was dented Thursday on reports the U.S.-China trade talks have taken a step backwards. This should not really be a surprise to anybody. Over the past many months traders and investors have been on a rollercoaster ride regarding progress or lack thereof in the trade negotiations between the two largest economies in the world. The latest reports are coming out of China, whereby Chinese officials Thursday expressed doubts about a complete trade deal with the U.S. ever being completed.
A weaker-than-expected Chicago ISM purchasing managers’ survey released in mid-morning action Thursday also aided the precious metals markets bulls as the data pushed the U.S. stock indexes lower and to daily lows. The U.S. Treasury market saw yields decline on the news, while the U.S. dollar saw more selling pressure. The October Chicago ISM reading came in at 43.2 versus 47.1 in September. The October number was well below market expectations and the lowest in almost four years. A reading below 50.0 suggests contraction in the sector.
In overnight news, the Euro zone reported its third-quarter GDP at up a paltry 0.2% from the second quarter and up 1.1%, year-on-year.
Meantime, China’s manufacturing purchasing managers’ index (PMI) was reported at 49.3 in October versus 49.8 in September and a forecast of 49.8.
Hong Kong’s third-quarter GDP was reported down 2.9%, year-on-year, amid that city-state’s ongoing civil unrest.
Focus of the world marketplace now turns to the U.S. employment situation report for October from the Labor Department that is due out Friday morning. That’s arguably the most important U.S. economic report of the month. The key non-farm payrolls number is forecast up a modest 75,000 jobs.
The key “outside markets” find Nymex crude oil prices lower in midday U.S. action today and trading around $54.00 a barrel. Meantime, the U.S. dollar index is solidly lower.
Technically, the gold bulls have the overall near-term technical advantage and have regained upside momentum late this week. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $1,543.30. Bears’ next near-term downside price breakout objective is pushing December futures prices below solid technical support at $1,478.00. First resistance is seen at $1,520.90 and then at $1,525.00. First support is seen at $1,510.00 and then at $1,500.00. Wyckoff’s Market Rating: 7.0
December silver futures bulls have the overall near-term technical advantage and have regained momentum late this week. Prices have been trending higher for four weeks. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $18.81 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at last week’s low of $17.44. First resistance is seen at $18.25 and then at $18.35. Next support is seen at today’s low of $17.795 and then at this week’s low of $17.59. Wyckoff’s Market Rating: 6.5.
By Jim Wyckoff
For Kitco News
Contact jwyckoff@kitco.com
www.kitco.com
