Gold price weaker as bond yields continue to rise

(Kitco News, Mon. Oct. 11th, 2021) – Gold and silver prices are modestly down in early U.S. trading Monday. Rising government bond yields recently and an appreciating U.S. dollar on the foreign exchange market are bearish elements that are keeping buyers of the safe-haven metals timid. December gold futures were last down $2.40 at $1,755.00. December Comex silver was last down $0.125 at $22.58 an ounce.

Global stock markets were mixed in overnight trading. The U.S. stock indexes are pointed to weaker openings when the New York day session begins. The U.S. government is closed for the Columbus Day holiday Monday, including the U.S. Treasury markets. That is likely to make for quieter trading in the U.S. today. Traders and investors worldwide are tentative to start the trading week. Supply-chain bottlenecks and rising energy prices are prompting worries about slowing global economic growth. Goldman Sachs over the weekend cut its U.S. economic growth forecasts for this year and next. Some European countries are worried about having enough energy for winter heating. These concerns followed an uninspiring U.S. employment report released Friday morning.

The key outside markets today see the U.S. dollar index firmer. Nymex crude oil futures are solidly up, hit a seven-year high overnight, and are trading around $81.50 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.612%. Bond yields are on the rise, which has heightened fears of rising inflation or even stagflation, which is a combination of rising prices and slowing economic growth.

U.S. economic data due for release Monday includes is light and includes the employment trends index.

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Technically, December gold futures bears still have the slight overall near-term technical advantage. However, a four-week-old downtrend on the daily bar chart has been negated. Bulls’ next upside price objective is to produce a close above solid resistance at $1,800.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the September low of $1,721.10. First resistance is seen at the overnight high of $1,761.10 and then at $1,771.50. First support is seen at $1,750.00 and then at last week’s low of $1,745.40.

The silver bears have the firm overall near-term technical advantage. Silver bulls’ next upside price objective is closing December futures prices above solid technical resistance at $24.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the September low of $21.41. First resistance is seen at the overnight high of $22.825 and then at $23.00. Next support is seen at $22.385 and then at $22.50

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com