Price declines in gold, silver as U.S. stock indexes rebound

(Kitco News, Tues. Oct. 5th, 2021) – Gold and silver prices are weaker in early U.S. trading Tuesday, following modest overnight rebounds in the U.S. stock indexes. The U.S. dollar index is also firmer today and that”s a negative for the metals markets. Still, the global equities markets remain wobbly and that should limit the downside in the safe-haven metals. December gold futures were last down $8.50 at $1,759.00. December Comex silver was last down $0.065 at $22.58 an ounce.

Global stock markets were mixed in overnight trading. The U.S. stock indexes are pointed to firmer openings when the New York day session begins, after suffering losses Monday. The U.S. stock indexes have hit three-month lows recently are now trending down on a near-term basis (daily charts). There are still risk-off attitudes in the marketplace early this week. Another Chinese property firm, Fantasia Group Holdings, missed a debt payment this week. Fantasia is not as big as the troubled Evergrande property firm, but there are growing concerns about a contagion effect in the financial markets. There are lingering worries about supply-chain bottlenecks that have many businesses unable to obtain their products in a timely fashion. That matter and rapidly rising energy prices have helped to stoke price inflation fears and even notions of a return of “stagflation” that gripped world economies in the early 1980s.

In other overnight news, the Euro zone reported its August producer prices up 1.1% from July and up 13.4%, year-on-year. Those numbers were in line with market expectations but are certainly “hot” inflation readings compared to recent years.

Australia”s central bank left its interest rates unchanged at its regular monetary policy meeting Tuesday, including keeping in place its bond-buying program. The bank said it won”t raise interest rates before 2024.

The key outside markets today see the U.S. dollar index modestly up. Nymex crude oil futures are slightly up and trading around $78.00 a barrel after hitting a nearly seven-year high on Monday. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.496%.

U.S. economic data due for release Tuesday includes the weekly chain store and Johnson Redbook retail sales reports, the international trade report, the U.S. and global services PMIs, the ISM report on business services, and the IDB/TIPP economic optimism index.

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Technically, December gold futures bears have the 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 $1,800.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,700.00. First resistance is seen at this week”s high of $1,771.50 and then at $1,788.40. First support is seen at the overnight low of $1,753.80 and then at this week”s low of $1,747.70.

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 this week”s high of $22.805 and then at $23.00. Next support is seen at this week”s low of $22.29 and then at $22.00.

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com