Modest price bounce for gold, on short covering

Gold prices are up a bit in early U.S. trading Wednesday, on a corrective rebound after hitting a six-week low Tuesday. Short covering by the shorter-term futures traders is featured. The upside in the safe-haven metals is limited at mid-week, as the marketplace is calmer following Tuesday’s sharp sell off in the U.S. stock market. December gold futures were last up $3.90 at $1,741.30. December Comex silver was last down $0.202 at $22.265 an ounce.

Global stock markets were mixed in overnight trading, with Asian shares mostly weaker and European shares mostly up. The U.S. stock indexes are pointed to higher openings when the New York day session begins, after seeing sharp losses Tuesday. The marketplace appears a bit calmer at mid-week, following early-week risk aversion that was prompted by rising government bond yields and worries about energy shortages in major economies. It also appears financial markets had a bit of a delayed reaction to last week’s FOMC meeting that saw the Federal Reserve lay the groundwork for tapering its monthly bond-buying program that has been in place for quite some time.

President Biden’s infrastructure package is set for a House of Representatives vote on Thursday. Meantime, the U.S. government’s funding will run out at midnight Thursday, which if not extended, would shut down part of the government Friday.

The key outside markets today see the U.S. dollar index slightly higher and hitting an 11-month high overnight. Nymex crude oil futures are weaker and trading around $74.75 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.501%.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, pending home sales and the weekly DOE liquid energy stocks report.

Technically, December gold futures bears have the overall near-term technical advantage. Prices are in a three-week-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at last week’s high of $1,788.40. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,700.00. First resistance is seen at $1,750.00 and then at this week’s high of $1,760.90. First support is seen at the overnight low of $1,733.20 and then at this week’s low of $1,727.80. Wyckoff’s Market Rating: 3.0

The silver bears have the solid overall near-term technical advantage. Silver bulls’ next upside price objective is closing December futures prices above solid technical resistance at $23.50 an ounce. The next downside price objective for the bears is closing prices below solid support at $21.00. First resistance is seen at the overnight high of $22.565 and then at this week’s high of $22.865. Next support is seen at this week’s low of $22.08 and then at the September low of $22.025. Wyckoff’s Market Rating: 1.0.By Jim Wyckoff

For Kitco News