Gold, Silver Prices Gain On Global Growth, Geopolitical Concerns

(Kitco News) – Gold and silver prices are moderately higher in early U.S. trading Wednesday. Safe-haven demand continues to be featured for the two precious metals at mid-week, amid heightened concerns about slowing world economic growth. Geopolitics also remains close to the front burner of the marketplace, which is also supporting gold and silver. December gold futures were last up $8.20 an ounce at 1,522.80. September Comex silver prices were last up $0.155 at $17.14 an ounce.

U.S. Treasury and world government bond yields continue to fall, mostly due to worries about world economies stagnating. The three-month Treasury bill and two-year note yields are trading above that of the 10-year note, to produce a partially inverted yield curve. However, the yield on the 30-year bond is still above that of the 10-year note. Still, the falling government bond yields, globally, paint a dim picture for the marketplace. The German bund hit another new record-low yield again Wednesday.

Germany’s gross domestic product contracted by 0.1% in the second quarter from the first quarter and was up a paltry 0.4% year-on-year, it was reported Wednesday. Meantime, the Euro zone GDP growth was 0.2% in the second quarter from the first quarter, and up 1.1%, year-on-year. Those numbers were in line with expectations.

Asian stock markets were mostly higher overnight and European stock markets were mostly lower. U.S. stock indexes are pointed toward lower openings when the New York day session begins.

Asian markets were lifted on an apparent thawing in the U.S.-China trade war. It appears the U.S. “blinked” Tuesday when U.S. trade officials said they are delaying until December some of the tariffs on Chinese imports that were set to go into effect on September 1. Economic data coming out of China Wednesday showed the number-two economy in the world has been significantly damaged by its trade war with the U.S.

The civil unrest in Hong Kong remains in focus among traders and investors worldwide. The Hong Kong airport has fully reopened Wednesday, but protestors are still there. President Trump said Tuesday that U.S. intelligence shows Chinese troops have moved to the border with Hong Kong.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, import and export prices and the weekly DOE liquid energy stocks report.

Technically, the gold bulls have the strong overall near-term technical advantage. A 10-week-old uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in October futures above solid resistance at $1,600.00. Bears’ next near-term downside price breakout objective is pushing December futures prices below solid technical support at $1,500.00. First resistance is seen at $1,529.10 and then at this week’s high of $1,546.10. First support is seen at $1,510.00 and then at today’s low of $1,504.50. Wyckoff’s Market Rating: 8.5

September silver futures bulls have the solid overall near-term technical advantage. Prices are in a 2.5-month-old uptrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $18.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.685. First resistance is seen at $17.26 and then at this week’s high of $17.49. Next support is seen at $17.00 and then at the overnight low of $16.855. Wyckoff’s Market Rating: 8.0.

By Jim Wyckoff
For Kitco News


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