Gold price erosion continues amid strong U.S. dollar, higher bond yields

Gold and silver prices are again lower in early U.S. trading Friday, with gold hitting a three-week low. The seemingly relentless appreciation of the U.S. dollar on the foreign exchange market and the resulting rise in U.S. Treasury yields continue to undermine the precious metals markets. December gold was last down $11.50 at $1,625.20 and December silver was down $0.434 at $18.255.

Global stock markets were mixed to lower overnight. U.S. stock indexes are pointed to lower openings when the New York day session begins. The marketplace late this week is more risk averse and focused on the march higher in U.S. Treasury yields. The U.S. 10-year note yield is presently fetching 4.278%, which is the highest level since 2008. The Federal Reserve is hellbent on taming problematic inflation and is willing to let the U.S. economy stall out to get the job done more quickly. This scenario is bearish for stocks, bonds and commodity markets, but bullish for the U.S. dollar.

Goldman Sachs sees a scenario where gold rally's sharply to $2,250 by 2025

The key outside markets today see the U.S. dollar index solidly higher. Nymex crude oil prices are near steady and trading around $84.50 a barrel.

There is no major U.S. economic data due for release Friday.

Technically, the December gold futures bears have the solid overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $1,700.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,600.00. First resistance is seen at $1,650.00 and then at Wednesday’s high of $1,659.80. First support is seen at $1,615.00 and then at $1,600.00. Wyckoff's Market Rating: 1.0

September silver futures bears have the solid overall near-term technical advantage and have momentum. Silver bulls' next upside price objective is closing prices above solid technical resistance at $20.00. The next downside price objective for the bears is closing prices below solid support at the September low of $17.40. First resistance is seen at today’s high of $18.625 and then at $19.00. Next support is seen at $18.00 and then at $17.40. Wyckoff's Market Rating: 2.0.

By Jim Wyckoff

For Kitco News

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