Gold, Silver Prices Up Amid Wobbly U.S. Stock Market

(Kitco News) - Gold and silver prices are modestly higher in early-afternoon U.S. trading Thursday. Some worries about the health of the U.S. stock market, following the recent sell-offs and increased volatility, are supporting the safe-haven metals. The precious metals bulls are impressed their markets are able to post modest gains today in the face of a stronger U.S. dollar index. December gold futures were last up $2.70 an ounce at $1,212.80. December Comex silver was last up $0.125 at $14.205 an ounce.

A batch of U.S. economic data today was a mixed bag for the marketplace, with the metals prices seeing no significant reaction after their morning releases.

U.K. Prime Minister Theresa May had two of her cabinet members resign Thursday, including her Brexit secretary, following May’s pronouncement Wednesday that she is sticking with her controversial Brexit plan. The British pound sunk on the news of the resignations, while European bond yields rose. There is now talk May could see Parliament move to a no confidence vote. Gold may be seeing some limited safe-haven buying interest from this matter. However, the situation is not a serious geopolitical factor for the world marketplace.

The U.S. dollar index is trading higher today and not far below this week’s 1.5-year high. The strong U.S. economy compared to most other world economies, and the interest rate differentials in those economies that see U.S. rates significantly higher, are bullish underlying elements that are likely to continue to provide strong support for the greenback.

The marketplace took note of U.S. Federal Reserve Chairman Jerome Powell’s comments at a speech late Wednesday that the Fed is closely monitoring the modest deceleration in world economic growth. However, Powell implied that situation is not now altering the Fed’s monetary policy tenor of continuing to slowly raise U.S. interest rates. Powell added that a further U.S. stock market sell off could impact the Fed’s policy decisions.

Traders and investors are also keeping a close eye out for new developments on the U.S.-China trade war front. Reports this week say there has been movement on China’s part to better communicate with the U.S. regarding getting formal discussions under way. Most believe the G20 meetings in Argentina later this month will see U.S. President Trump and Chinese Premiere Xi meet face-to-face on the matter. A U.S.-China trade agreement would likely see the metals markets react in bullish fashion, as China is a major metals importer.

The big drop in crude oil prices the past six weeks has the world marketplace very uneasy. Nymex crude oil futures prices are firmer today on short covering and trading just below $57.00, after dropping to an 11-month low of $54.75 a barrel on Tuesday. In less than six weeks’ time Nymex crude prices have dropped by over $20 a barrel. The steep slide in oil prices is a bearish element for most of the raw commodity sector, including the precious metals, as oil is arguably the leader of that sector.

Technically, the gold bears still have the overall near-term technical advantage. Gold bulls' next upside near-term price breakout objective is to produce a close in December futures above solid technical resistance at $1,230.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the September low of $1,184.30. First resistance is seen at this week’s high of $1,217.20 and then at $1,220.00. First support is seen at today’s low of $1,207.10 and then at $1,200.00. Wyckoff's Market Rating: 3.0.

The silver bears have the solid overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $14.775 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $13.50. First resistance is seen at $14.425 and then at $14.50. Next support is seen at today’s low of $14.07 and then at $14.00. Wyckoff's Market Rating: 1.5.

December N.Y. copper closed up 430 points at 275.30 cents today. Prices closed nearer the session high on more short covering. 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 September high of 287.10 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 278.00 cents and then at 280.00 cents. First support is seen at today’s low of 270.30 cents and then at this week’s low of 266.25 cents. Wyckoff's Market Rating: 3.5.