Gold Price Analysis – Strong greenback, rising bond yields put price pressure on gold, silver
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(Kitco News) – Gold and silver prices are modestly down in early U.S. trading Wednesday. The key outside markets are in bearish daily postures for the metals at mid-week: a higher U.S. dollar index, rising Treasury bond yields and weaker crude oil prices. However, lower U.S. stock indexes today that are presently trending down will continue to keep a floor under the safe-haven gold and silver markets. December gold futures were last down $5.80 at $1,755.10. December Comex silver was last down $0.263 at $22.345 an ounce.
Global stock markets were mostly lower in overnight trading. The U.S. stock indexes are pointed to lower openings when the New York day session begins. Trading has turned choppy in the indexes but near-term price downtrends are in place for the S&P and Nasdaq futures. U.S. lawmakers are still struggling to agree upon a big government spending bill as will as a debt-limit bill. Reports say the Biden administration is willing to reduce the size of the spending bill to get Republicans to agree to it.
The U.S. data point of the day is the ADP national employment report for September, which is forecast at up 425,000 jobs versus a gain of 374,000 seen in the August ADP report. This report precedes the more important U.S. employment report from the Labor Department on Friday morning. The key non-farm jobs number in that report is forecast at up 500,000 in September after a paltry gain of 235,000 in August.
Reports said India’s September gold imports in September rose 658% from September of 2020. India imported 91 metric tons of gold in September compared to 12 metric tons in September of 2020. Jewelry makers stocked up as the Indian currency, the rupee, appreciated and gold prices fell.
The key outside markets today see the U.S. dollar index higher and back near last week’s 12-month high. Nymex crude oil futures are slightly down and trading around $78.75 a barrel after hitting a nearly seven-year high overnight. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.566%. For perspective, the German 10-year bund is trading at minus 0.150% and the U.K. 10-year gilt at 1.143%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report and the weekly DOE liquid energy stocks report.
Technically, December gold futures bears have the overall near-term technical advantage. Prices are in a four-week-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,800.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,700.00. First resistance is seen at this week’s high of $1,771.50 and then at $1,788.40. First support is seen at the overnight low of $1,745.40 and then at $1,737.50. Wyckoff’s Market Rating: 3.5
The silver bears have the solid overall near-term technical advantage. Silver bulls’ next upside price objective is closing December futures prices above solid technical resistance at $23.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $20.00. First resistance is seen at this week’s high of $22.805 and then at $23.00. Next support is seen at the overnight low of $22.185 and then at $22.00. Wyckoff’s Market Rating: 2.0.
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