Gold, Silver Prices Pop On U.S. Dollar Drop

(Kitco News) – Gold and silver prices are moderately higher in early U.S. trading Tuesday, boosted by a sharp drop in the U.S. dollar index today. December gold futures were last up $7.10 an ounce at $1,233.40. December Comex silver was last up $0.175 at $14.675 an ounce.

Tuesday’s U.S. mid-term elections turned out as many had expected and saw the Republicans maintain control of the Senate but the Democrats gained control of the House of Representatives. The world marketplace appears comfortable with a split U.S. Congress and likely gridlock on major new legislation over the next two years.

Many believed the U.S. elections were a referendum on the performance of President Trump. Many would argue the U.S. elections did not turn out too bad for Trump, noting that history shows the party not in control typically fares better in mid-term elections.

The U.S. dollar is taking a solid downside hit following the elections. There are now notions any new Trump fiscal policy proposals that would be pro-growth and pro-business will get mired down in Congress and die.

Global stock markets were mixed to firmer overnight, with European shares mostly up and Asian shares narrowly mixed. U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins.

With the U.S. elections out of the way, focus will turn to the Federal Reserve’s Open Market Committee (FOMC) that meets for a two-day session to discuss U.S. monetary policy, with a statement due Thursday afternoon. No change in interest rates is expected at this meeting. As always, traders will scrutinize wording of the FOMC statement and Chairman Jay Powell’s remarks at his press conference, for clues on the future direction and timing of U.S. monetary policy.

The other key “outside market” today finds Nymex crude oil prices higher and trading around $62.75 a barrel.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly DOE liquid energy stocks report and consumer installment credit.

Technically, gold bulls and bears are on a level overall near-term technical playing field. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at the October high of $1,246.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,200.00. First resistance is seen at last week’s high of $1,239.30 and then at $1,246.00. First support is seen at the overnight low of $1,224.20 and then at $1,220.00. Wyckoff’s Market Rating: 5.0

December silver futures bears have the overall near-term technical advantage. However, 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 $14.95 and then at $15.00. Next support is seen at the overnight low of $14.475 and then at last week’s low of $14.24. Wyckoff’s Market Rating: 3.0.

By Jim Wyckoff
For Kitco News


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