Gold, Silver Prices See Tepid Short Covering On Weaker U.S. Dollar

(Kitco News) - Gold and silver prices are modestly up in early-afternoon U.S. trading Wednesday. Short covering in the futures markets and some perceived bargain hunting in the cash markets were featured today. A sell off in the U.S. dollar index today also worked in favor of the precious metals market bulls. December gold futures were last up $2.20 an ounce at $1,201.30. December Comex silver was last up $0.035 at $14.215 an ounce.

Global trade worries and the potential drag on the major economies of the world are somewhat weighing on equities markets this week. However, the matter has not produced much safe-haven demand for the metals at all. Instead, metals traders appear more worried that any economic weakness from the trade disputes could mean less demand for the metals. The U.S. and Canada are deadlocked on trade negotiations, while there are concerns the U.S. will slap more trade sanctions on China.

Secondary currency markets, including the Argentine peso and Turkish lira, remain under pressure against the U.S. dollar this week. There are still worries this matter could turn into something more serious that impacts the global financial system.

The key outside markets today find the U.S. dollar index lower after holding slight overnight gains. Meantime, Nymex crude oil prices are lower on a corrective pullback after hitting a 3.5-month high on Tuesday. Now, it appears the oil market bulls are near-term exhausted, which could mean a near-term market top is in place for crude.

Technically, December gold futures bears still have the solid overall near-term technical advantage. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical 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 this week’s high of $1,209.70 and then at $1,215.00. First support is seen at this week’s low of $1,195.10 and then at $1,189.50. Wyckoff's Market Rating: 2.0

December silver futures saw tepid short covering after hitting a 2.5-year low on Tuesday. The silver bears have the solid overall near-term technical advantage. There are no early clues to suggest a market bottom is close at hand. 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 $15.405 and then at this week’s high of $14.59. Next support is seen at this week’s low of $14.035 and then at $14.00. Wyckoff's Market Rating: 1.0.

December N.Y. copper closed up 105 points at 261.25 cents today. Prices closed nearer the session high on short covering in a bear market. The copper bears still have the solid 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 283.80 cents. The next downside price objective for the bears is closing prices below solid technical support at the August low of 257.45 cents. First resistance is seen at 265.00 cents and then at this week’s high of 268.00 cents. First support is seen at 260.00 cents and then at 257.45 cents. Wyckoff's Market Rating: 1.0.