Gold price near steady; geopolitics remain on front burner

(Kitco News, Mon. Oct. 7th, 2024) – Gold prices are near steady and silver prices lower in early U.S. trading Monday. The Middle East geopolitical situation is keeping a floor under the gold and silver markets as tensions remain elevated to start the trading week. December gold was last down $0.20 at $2,667.60 and December silver was down $0.509 at $31.885.

There is keener risk aversion in the general marketplace. There are reports that an earthquake Saturday in Iran could have been an underground nuclear test explosion. The earthquake in Iran registering 4.5 on the Richter scale looks like underground firing of a nuclear device, said broker SP Angel in an email dispatch. The epicenter was close to Aradan City and only at a depth of 10 kilometers according to the U.S. Geological Survey, said SP Angel. This comes as Israel continues its offensive in Lebanon and has vowed to retaliate against Iran’s missile attack. There is concern Israel may target Iran’s crude oil infrastructure, which is pushing oil prices higher.

The markets have mostly digested last Friday’s stronger monthly U.S. jobs report that likely sets the Federal Reserve on a path to smaller interest rate cuts in the coming months.

Asian and European stock indexes were mixed overnight. China markets are closed one more day for an extended holiday and reopen Tuesday. U.S. stock indexes are pointed to lower openings when the New York day session begins.

China’s gold reserves unchanged for fifth straight month in September. China’s gold holdings stood at 72.8 million troy ounces at the end of last month. The value of the gold reserves, however, rose to $191.47 billion from $182.98 billion at the end of August. Global central banks, which actively bought gold in 2022-2023, are on track to slow purchases in 2024 from 2023, according to the World Gold Council, but to keep them above the pre-2022 level. This is partly due to the pause in purchases by the People’s Bank of China, which until May had bought gold for 18 consecutive months.

The key outside markets today see the U.S. dollar index near steady. Nymex crude oil prices are higher, at a six-week high, and trading around $76.50 a barrel. The benchmark 10-year U.S. Treasury note yield is presently fetching 4.005%.

U.S. economic data due for release Monday includes the employment trends index and consumer credit.

Technically, December gold bulls have the strong overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $2,800.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $2,600.00. First resistance is seen at the overnight high of $2,679.20 and then at Friday’s high of $2,690.60. First support is seen at the overnight low of $2,659.00 and then at $2,650.00.

December silver futures bulls have the firm overall near-term technical advantage. Prices are in a seven-week-old uptrend on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the May high of $33.50. The next downside price objective for the bears is closing prices below solid support at $30.00. First resistance is seen at the overnight high of $32.595 and then at $33.00. Next support is seen at $31.65 and then at this week’s low of $31.155.

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com