Gold, Silver Prices Hit By Stronger U.S. Dollar

(Kitco News) - Gold and silver prices are lower in early-afternoon U.S. trading Tuesday, but up from daily lows that saw silver hit a 2.5-year low. A stronger U.S. dollar on the foreign exchange market today trumped ongoing world trade tensions and shaky secondary currency markets. December gold futures were last down $7.40 an ounce at $1,199.30. December Comex silver was last down $0.387 at $14.17 an ounce.

World stock markets were mostly lower today, amid ongoing world trade worries after President Trump during the weekend threatened to exclude Canada from the just-concluded U.S.-Mexico trade deal. Presently, the specter of reduced demand for precious metals due to inhibited world economic growth from the trade spats is outweighing any safe-haven demand for the metals from the trade situation.

The calendar has turned to September and investors are likely in a more serious mood, after a summertime of fun and family vacations. The months of September and October many times find the marketplace focusing on matters of worry. The next couple of months could well find the marketplace closely examining the secondary currency markets and the beating they have taken against the U.S. dollar this year. If the secondary currency markets continue to depreciate against the dollar, such could create some safe-haven demand for gold and silver due to fears of a currency market contagion.

The key outside markets today find the U.S. dollar index higher as the greenback continues its assault on the world’s secondary currencies. Meantime, Nymex crude oil prices are slightly up but well off overnight highs that saw prices hit a 3.5-month high, on worries about a hurricane in the Gulf of Mexico shutting in some U.S. crude oil production for a period of time.

Technically, gold bears have the solid overall near-term technical advantage. Gold bulls' next upside near-term price breakout objective is to produce a close in December futures above solid resistance at last week’s high of $1,220.70. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the August low of $1,167.10. First resistance is seen at today’s high of $1,209.70 and then at Friday’s high of $1,214.90. First support is seen at today’s low of $1,195.10 and then at $1,189.50. Wyckoff's Market Rating: 2.0.

December silver futures bears have the solid overall near-term technical advantage and gained more power today. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $15.07 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.00. First resistance is seen at $14.405 and then at today’s high of $14.59. Next support is seen at today’s low of $14.035 and then at $14.00. Wyckoff's Market Rating: 1.0.