(Kitco News) - Gold prices are modestly higher in early U.S. trading but scored a six-week high overnight. Safe-haven buying is the feature in the gold market this week as the world market place is very uneasy heading into the weekend. December Comex gold was last up $1.80 at $1,154.70 an ounce. September Comex silver was last down $0.092 at $15.425 an ounce.

World stock markets are selling off again Friday. China’s Shanghai index was down over 4% on the day. Japan’s Nikkei stock index was down around 3%. European stock markets were also down. U.S. stock indexes are also under pressure again early Friday morning and are trading at or near their lows for this year. Veteran traders know the upcoming months of September and October can be nasty ones for stock market bulls.

Periphery currency markets were also unsettled and seeing selling again Friday morning, following the turmoil seen in those currencies Thursday. The U.S. dollar index is also seeing downside price action Friday and hit a seven-week low.

Worries about China’s wobbly economy, mixed ideas on U.S. Federal Reserve policy after this week’s FOMC minutes, tumbling crude oil prices that are at a 6.5-year low late this week, and even shots fired between North Korea and South Korea recently, are making the world market place very uneasy at present. Many traders and investors will not want to head home for the weekend with big positions—not knowing what to expect in the markets come Monday morning. Such is likely to lead to more selling in many markets on Friday.

There was another downbeat economic report coming out of China Friday. The preliminary Caixin China manufacturing purchasing managers’ index for August came in at 47.1 versus 47.8 in July. The reading was at a 77-month low, reports said. A number below 50.0 suggests contraction in the sector.

In the Euro zone, its composite PMI came in at 54.1 in August versus 53.9 in July. A 54.2 number was expected. This data was deemed upbeat by European market watchers.

U.S. economic data due for release Friday includes the flash manufacturing purchasing managers’ index.

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Wyckoff’s Daily Risk Rating: 3.0 (Trader and investor market risk aversion is moderate late this week, amid nervousness and uncertainty on several fronts.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 5, with 1 being least risk-averse (most risk-on) and 5 being the most risk-averse (risk-off).

The London A.M. gold fix is $1,149.35 versus the previous P.M. fix of $1,147.70.

Technically, December gold futures bulls and bears are now on a level near-term technical playing field, but the bulls have momentum on their side. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,180.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,126.30. First resistance is seen at $1,160.00 and then at today’s high of $1,167.90. First support is seen at today’s low of $1,148.50 and then at $1,140.00. Wyckoff’s Market Rating: 5.0

September silver futures bears still have the near-term technical advantage. However, prices hit a five-week high overnight and late-week price action has given the bulls fresh upside momentum, to better suggest a market bottom is in place. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at the July high of $15.90 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at this week’s low of $14.68. First resistance is seen at the overnight of $15.715 and then at $15.90. Next support is seen at $15.25 and then at $15.00. Wyckoff's Market Rating: 4.0.

By Jim Wyckoff
Friday August 21, 2015 08:20

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