Gold, silver see slight price gains on tepid short covering

(Kitco News, Thurs. Sep 30th, 2021) – Gold and silver prices are slightly up in early U.S. trading Thursday, on a mild corrective rebounds after gold hit a six-week low and silver a 14-month low on Tuesday. Short covering by the shorter-term futures traders seen today. However, the recent strong gains in the U.S. dollar index, which hit a 12-month high overnight, are still squelching the metals market bulls. December gold futures were last up $3.70 at $1,726.60. December Comex silver was last up $0.125 at $21.61 an ounce.

Global stock markets were mixed to firmer in overnight trading. The U.S. stock indexes are pointed to higher openings when the New York day session begins. Risk aversion has abated a bit late this week, following Tuesday’s big sell off in the U.S. stock indexes. The U.S. Senate will vote today on a bill extending government funding until Dec. 3 to avoid a shutdown when the fiscal year ends at midnight tonight. The bill is expected to pass.

In other overnight news, China’s official manufacturing purchasing managers index (PMI) declined to 49.6 in September from 50.1 in August. That’s the first time in 18-months that the manufacturing reading fell below 50.0. However, the services PMI number was 53.2 in September from 47.5 in August. A reading below 50.0 suggests contraction and a reading above 50.9 suggests growth in the sector. Separately, Reuters reported China’s big property giant Evergrande has indeed missed debt payments to offshore bond holders this month.

Thursday is the last trading day of the month and of the quarter, which makes it an extra important trading day from a technical perspective.

The key outside markets today see the U.S. dollar index higher and hitting a 12-month high overnight. Nymex crude oil futures are near steady and trading around $74.75 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.527%.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the third estimate of second-quarter GDP, and the ISM Chicago business survey. Several Federal Reserve officials are slated to speak today, including Fed Chairman Powell, who with Treasury Secretary Yellen will speak to a House of Representatives committee.

Technically, December gold futures bears have the firm overall near-term technical advantage. Prices are in a four-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 the overnight high of $1,734.90 and then at Wednesday’s high of $1,746.00. First support is seen at this week’s low of $1,721.10 and then at $1,710.00.

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 $23.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $20.00. First resistance is seen at $22.00 and then at $22.50. Next support is seen at this week’s low of $21.41 and then at $21.00.

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com