Gold, silver down as crude oil drops, U.S. Treasury yields rise

Gold and silver prices are lower in midday U.S. trading Wednesday, with gold hitting a five-week low and silver a more-than-two-year low. Gold prices were well up from their daily lows, however.

Eroding crude oil prices and rising U.S. Treasury yields at mid-week are bearish outside market elements working against the metals markets on this day. October gold futures were last down $4.10 at $1,722.70. December Comex silver futures were last down $0.307 at $17.985 an ounce.

Today’s ADP national employment report for August showed a paltry rise of 132,000 jobs, which was well below the gain of 300,000 that the marketplace expected. The marketplace showed little reaction to the report, which has a recent history of not being a good indicator of Friday morning’s more important employment situation report from the Labor Department. That report is expected to show the key non-farm payrolls growth number at up 325,000 in August versus the July report showing a gain of 528,000 non-farm jobs.

Global stock markets were mostly lower overnight. U.S. stock indexes are weaker at midday. Traders and investors remain tentative at mid-week, following the Federal Reserve’s annual Jackson Hole symposium that saw U.S. Fed officials, including Chairman Powell, lean aggressively hawkish on U.S. monetary policy. Other major central banks of the world are also tightening their monetary policies—all in an effort to tamp down problematic price inflation, even if it slows global economic growth.

Speaking of inflation, the Euro zone got more hot readings as the August consumer price index rose 9.1%, year-on-year, which was slightly above market expectations.

The markets have not reacted much, but are paying close attention to reports that Taiwan’s military fired warning shots at drones, thought to be from mainland China, that were flying close to Taiwan.

The key outside markets today see Nymex crude oil prices solidly and trading around $90.00 a barrel. Reports are now indicating OPEC-plus will not cut its collective crude oil production. The U.S. dollar index is lower in midday U.S. trading. Meantime, the yield on the 10-year U.S. Treasury note is fetching around 3.12%.

Technically,October gold futures prices hit a five-week low today. The gold futures bears have the solid overall near-term technical advantage. Prices are in a three-week-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,780.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the July low of $1,686.30. First resistance is seen at today’s high of $1,728.70 and then at Tuesday’s high of $1,743.10. First support is seen at today’s low of $1,711.70 and then at $1,700.00. Wyckoff's Market Rating: 2.0.

December silver futures prices hit a more-than-two-year low today. The silver bears have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $19.50. The next downside price objective for the bears is closing prices below solid support at $17.00. First resistance is seen at today’s high of $18.39 and then at this week’s high of $18.83. Next support is seen at today’s low of $17.80 and then at $17.50. Wyckoff's Market Rating: 1.0.

December N.Y. copper closed down 340 points at 351.70 cents today. Prices closed near mid-range today and hit a three-week low. The copper bears have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the August high of 378.35 cents. The next downside price objective for the bears is closing prices below solid technical support at the July low of 315.55 cents. First resistance is seen at today’s high of 359.90 cents and then at this week’s high of 370.10 cents. First support is seen at today’s low of 344.45 cents and then at 340.00 cents. Wyckoff's Market Rating: 4.0.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips

 

Tim Moseley