Gold, Silver Sees Solid Price Gains as Greenback Wilts

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Nov 05, 2020 11:58 NY TimeKitco 10AM Silver Fix

Silver	25.02	+1.13
Platinum	894.00	+27.00
Palladium	2282.00	+117.00
Rhodium	11400.00	0.00

(Kitco News, Thurs. Nov. 5th, 2020) – Gold and silver futures prices are sharply up in early U.S. trading Thursday, boosted in part by a falling U.S. dollar index in the wake of the U.S. elections. Some safe-haven demand in the metals is also seen as the U.S. presidential election result is still up in the air. December gold futures were last up $33.20 at $1,929.50 and December Comex silver was last up $1.032 at $24.925 an ounce.

Asian and European stock markets were mostly up overnight. U.S. stock indexes are also set to open the New York day session sharply higher. The marketplace sees better risk appetite late this week, in the wake of the U.S. elections. While it’s still uncertain who will be the U.S. president in January (although Biden appears most likely to be, at present), a near certainty is that there will be gridlock in the U.S. Congress for at least the next two years. That’s good for stock and financial markets because no major, radical legislation would occur with a split U.S. Congress that will likely see the Republicans control the Senate and the Democrats control the House of Representatives.

The “inflation trade” that had gained steam in the weeks heading into the U.S. elections is now being unwound. Polls forecasting a Democratic sweep had many market watchers reckoning huge government spending programs that would help to ignite inflation. That won’t be the case now, and U.S. Treasury yields are dropping like a rock. The yield on the benchmark 30-year Treasury note is presently 0.74%.

Meantime, the U.S. dollar index has sold off sharply in the wake of the election. The other important outside market sees crude oil prices a bit weaker and trading around $39.00 a barrel. Oil market bulls have had a very good week, to suggest at least sideways and choppy price action for that market in the near term.

In overnight news, the Bank of England Thursday said it will ramp up its monetary stimulus measures as the U.K. grapples with increasing lockdowns as Covid-19 infections continue to rise.

The Federal Open Market Committee (FOMC) meeting that started Wednesday morning on Thursday afternoon concludes with a statement on U.S. monetary policy. Fed Chairman Powell will also hold a press conference Thursday afternoon. No major changes in U.S. monetary policy are expected, but as usual the marketplace will be looking for guidance on future actions from the Fed.

Friday the U.S. employment situation report for October from the Labor Department is out. The key non-farm payrolls number is seen up 530,000 and the unemployment rate is seen at 7.7% versus 7.9% seen in September.

U.S. economic data due for release Thursday include the weekly jobless claims report, the Challenger job-cuts report, preliminary productivity and costs, and the monthly chain store sales index.

Technically, the December gold futures bulls have the overall near-term technical advantage and are gaining momentum. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at the October high of $1,939.40. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the September low of $1,851.00. First resistance is seen at $1,939.40 and then at $1,950.00. First support is seen at the overnight low of $1,902.20 and then at $1,900.00.

December silver futures bulls have the overall near-term technical advantage and they have gained momentum this week. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the October high of $25.71 an ounce. The next downside price objective for the bears is closing prices below solid support at the October low of $22.625. First resistance is seen at $25.00 and then at $25.425. Next support is seen at $24.50 and then at $24.00.

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com