(Kitco News) – Gold and silver prices are solidly lower in early U.S. trading Friday. A strong U.S. dollar index, which hit a new high for the year, is helping to pressure the precious metals late this week. The chart postures for the two metals has also deteriorated a bit, and bulls need to step up and show power soon to avoid more serious technical damage, including price uptrends on the daily charts being negated and suggesting near-term market tops are in place. December gold futures were last down $13.20 an ounce at 1,502.10. December Comex silver prices were last down $0.292 at $17.62 an ounce.
A batch of just-released U.S. economic data contained no big surprises and did not move the markets significantly. Durable goods orders in August rose 0.2% from July, versus expectations of a 1.0% decline. Personal income in August was in line with expectations at up 0.4%. Personal spending in August was up only 0.1% from July, versus expectations of up 0.3%.
Asian stocks were mostly weaker, while European stock markets were mostly higher in overnight trading. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins.
Slowing global economic growth is in focus late this week. China reported its industrial profits dropped 2% in August, year-on-year. Producer price deflation also deepened in August. Other economic data released from the world’s second-largest economy Friday also showed China’s imports of raw commodities generally declining. The U.S.-China trade war has significantly crimped China’s economic growth.
Meantime, there was more dour economic news coming out of the European Union. The Euro zone September consumer confidence index was reported at minus 6.5 from minus 7.1 in August. Industrial confidence was reported at minus 8.8 in September from minus 5.8 in August.
The world marketplace is seeing risk appetite somewhat blunted by the U.S. House of Representatives considering impeaching President Trump. Whether Trump actually gets impeached seems unlikely at this time. However, the inquiry by the House is very likely to bog down the U.S. government to a standstill on new legislation, and is likely to hurt Trump’s foreign policy agenda.
Nymex crude oil prices are lower and trading around $55.00 a barrel. The drop in crude oil prices this week, combined with the strong dollar, is making for a bearish “outside market” posture for the metals.
U.S. economic data due for release Friday includes personal income and outlays, durable goods orders and the University of Michigan consumer sentiment survey.
Technically, the gold bulls still have the overall near-term technical advantage, but a four-month-old uptrend on the daily bar chart is in serious jeopardy of being negated. Bulls’ next upside price objective is to produce a close in October futures above solid resistance at the September high of $1,566.20. Bears’ next near-term downside price breakout objective is pushing December futures prices below solid technical support at the September low of $1,490.70. First resistance is seen at the overnight high of $1,514.40 and then at 1,520.00. First support is seen at the overnight low of $1,497.20 and then at $1,490.70. Wyckoff’s Market Rating: 6.5
December silver futures bulls have the overall near-term technical advantage but have faded badly late this week. A four-month-old uptrend is in serious jeopardy and the bulls need to show fresh power very soon to keep it in place. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at this week’s high of $18.81 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the September low of $17.47. First resistance is seen at the overnight high of $17.96 and then at $18.00. Next support is seen at $17.47 and then at $17.25. Wyckoff’s Market Rating: 6.0.
By Jim Wyckoff
For Kitco News
Contact jwyckoff@kitco.com
www.kitco.com
