Gold, silver rally on downbeat U.S. economic data
Gold and silver prices are higher in midday U.S. trading Tuesday, with gold hitting a three-week high and silver a four-week peak. A much weaker-than-expected U.S. jobs turnover report (JOLTS) and a much lower-than-expected consumer confidence index report prompted fresh buying interest in the precious metals. The U.S. dollar index sold off and U.S. Treasury yields dipped after the data. Both reports fell into the camp of the U.S. monetary policy doves, who think the Fed has raised interest rates enough to effectively slow down U.S. economic growth. This was the start of a big week for U.S. economic reports. December gold was last up $17.30 at $1,963.90 and December silver was up $0.51 at $25.115.
U.S. stock indexes are higher at midday, also boosted by the weaker U.S. economic data. Asian and European stock markets have been lifted early this week by news Monday that China cut a key tax rate and pledged to shore up its capital markets.
The busy U.S. data week is highlighted by Friday’s employment situation report for August from the Labor Department. The key non-farm payrolls number is expected to come in at up 170,000, compared to a rise of 187,000 in the July report.
The key outside markets today see the U.S. dollar index lower. Nymex crude oil futures prices are a bit firmer and trading around $80.50 a barrel. The benchmark U.S. Treasury 10-year note is presently fetching 4.131%.
Technically, December gold futures prices hit a three-week high today. Short covering and bargain hunting were featured. Bears still have the overall near-term technical advantage. However, a four-week-old downtrend on the daily bar chart has been negated and prices are starting to trend up. Bulls’ next upside price objective is to produce a close above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the August low of $1,913.60. First resistance is seen at $1,975.00 and then at $1,985.00. First support is seen at $1,950.00 and then at this week’s low of $1,941.10. Wyckoff's Market Rating: 4.0.
December silver futures prices hit a four-week high today. The silver bulls have the overall near-term technical advantage. Prices are trending higher on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the July high of $25.82. The next downside price objective for the bears is closing prices below solid support at $23.50. First resistance is seen at $25.50 and then at $25.82. Next support is seen at today’s low of $24.555 and then at $24.31. Wyckoff's Market Rating: 6.5.
December N.Y. copper closed up 405 points at 383.25 cents today. Prices closed nearer the session high. 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 403.75 cents. The next downside price objective for the bears is closing prices below solid technical support at the August low of 367.00 cents. First resistance is seen at last week’s high of 384.25 cents and then at 387.00 cents. First support is seen at today’s low of 378.70 cents and then at 376.55 cents. Wyckoff's Market Rating: 4.0.
By
Jim Wyckoff
For Kitco News
Tim Moseley