Gold up; charts hint USDX, U.S. bond yields may have peaked

(Kitco News, Wed.  Oct. 26th, 2022) – Gold and silver prices are solidly higher near midday U.S. trading Wednesday and hit two-week highs. The key outside markets are working in favor of the precious metals bulls at mid-week, as the U.S. dollar index is sharply lower, U.S. Treasury yields are lower and crude oil prices are higher. December gold was last up $18.80 at $1,676.70 and December silver was up $0.266 at $19.615.

Importantly, there are some very recent near-term technical developments that are now suggesting the U.S. dollar index has put in a major top and the U.S. stock indexes have put in major bottoms. To extrapolate, such could also mean inflation may be peaking (which would mean bond yields are peaking, too) and the Federal Reserve may be closer to the finish line on its aggressive monetary policy tightening path. All off the above may also mean the U.S. and/or global economy may be able to avoid a serious recession. While these are only extrapolations at present, it appears the precious metals traders are picking up on these early chart clues, reckoning not only that the greenback and bond yields may have peaked but also that it could mean better consumer and commercial demand for the metals markets in the coming months.

Stocks and real estate are not done crashing, don’t expect all-time highs for another 10 years – Chris Vermeulen

Global stock markets were mixed overnight. U.S. stock indexes are mixed at midday. The U.S. stock indexes hit five-week highs on Tuesday. Price uptrends on the daily bar charts have been negated and fledgling price uptrends are now in place. Technical evidence is mounting that market bottoms are in place for the U.S. stock indexes. Focus of stock traders this week is on corporate earnings reports.

The key outside markets today see the U.S. dollar index sharply lower. Nymex crude oil prices are up and trading around $87.65 a barrel. The 10-year U.S. Treasury note is yielding 4.005%.

Technically, December gold futures prices hit a two-week high today. The gold futures bears have the firm overall near-term technical advantage. However, more price gains in the near term would form a bullish double-bottom reversal pattern on the daily bar chart, to suggest a market bottom is in place. Bulls’ next upside price objective is to produce a close above solid resistance at $1,700.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,600.00. First resistance is seen at $1,690.00 and then at $1,700.00. First support is seen at today’s low of $1,653.80 and then at this week’s low of $1,641.20. Wyckoff’s Market Rating: 2.5.

December silver futures prices hit a two-week high today. The silver bears have the overall near-term technical advantage. However, recent price action suggests a market bottom is in place. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the October high of $21.31. The next downside price objective for the bears is closing prices below solid support at $17.40. First resistance is seen at today’s high of $19.765 and then at $20.00. Next support is seen at today’s low of $19.18 and then at $19.00. Wyckoff’s Market Rating: 3.0.

December N.Y. copper closed up 1,475 points at 354.45 cents today. Prices closed near the session high today and hit a three-week high. The copper bears have the overall near-term technical advantage. However, recent price action suggests a market bottom is in place. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at the September high of 369.25 cents. The next downside price objective for the bears is closing prices below solid technical support at the September low of 324.30 cents. First resistance is seen at the October high of 359.30 cents and then at 369.25 cents. First support is seen at this week’s low of 336.25 cents and then at the October low of 330.30 cents.

Posted by:

Jack Dempsey. President

401 Gold Consultants LLC

jdemp2003@gmail.com