Gold, silver weaker as USDX rallies

Gold and silver prices are modestly lower in midday U.S. trading Thursday, on downside corrections following this week’s gains and amid a solid rally in the U.S. dollar index today. December gold was last down $4.60 at $1,968.50 and December silver was down $0.254 at $24.855.

The U.S. data point of the day Thursday was the personal income and outlays report for August, including the closely watched PCE inflation readings. The core PCE reading for August came in at up 4.2%, year-on-year, which was right in line with market expectations and compares to up 4.1% in the July report. Markets showed no significant reactions to the as-expected report.

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. Downbeat U.S. data released so far this week has many thinking Friday’s jobs report will be in line with market expectations, or a bit weaker.

U.S. stock indexes are mixed at midday. The stock index bulls are having a good week and hit three-week highs overnight.

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The key outside markets today see the U.S. dollar index solidly higher on a corrective rebound from recent selling pressure. Nymex crude oil futures prices are higher and trading around $82.50 a barrel. The benchmark U.S. Treasury 10-year note is presently fetching 4.08%.

Technically, December gold futures bears have the overall near-term technical advantage. However, 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 this week’s high of $1,977.10 and then at $1,985.00. First support is seen at Wednesday’s low of $1,962.80 and then at $1,950.00. Wyckoff's Market Rating: 4.0.

December silver futures 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 today’s high of $25.06 and then at this week’s high of $25.425. Next support is seen at today’s low of $24.745 and then at $24.555. Wyckoff's Market Rating: 6.5.

December N.Y. copper closed down 215 points at 382.25 cents today. Prices closed near mid-range. The copper bears have the slight overall near-term technical advantage. However, prices are starting to trend up. 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 this week’s high of 385.05 cents and then at 388.00 cents. First support is seen at this week’s low of 378.00 cents and then at 375.00 cents. Wyckoff's Market Rating: 4.5.

By

Jim Wyckoff

For Kitco News

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