Stock Futures Drop on Coronavirus Uptick, Fading Stimulus Hopes U.S. and Several Countries in Europe are Facing Elevated coronavirus Case Levels, Gold sees slight price weakness amid firmer USDX.

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Oct 26, 2020 11:04 NY TimeKitco 10AM Silver Fix

Silver	24.27	-0.30
Platinum	864.00	-34.00
Palladium	2240.00	-40.00
Rhodium	11800.00	0.00

(Mon. Oct. 26th, 2020) – U.S. stock futures and oil prices fell Monday, as coronavirus cases surged in the U.S. and Europe, adding to worries about the economic outlook after Congress and the White House failed to agree on a much-anticipated fiscal stimulus deal.

Futures tied to the S&P 500 dropped 0.9%, pointing to a decline in U.S. markets after the opening bell. Last week, the broad-market index retreated 0.5%.

The U.S. reported 60,789 new cases on Sunday, down from recent record-setting levels, but up from a week earlier. Scientists had been expecting cooler weather to lead to a second wave of the disease, but it is coming earlier than many had anticipated. That is prompting fresh concerns about tighter lockdown restrictions and the effect on the economy.

“It’s a worrying picture for sure. You may have to account for the possibility that by midwinter, there might be circuit breakers implemented,” including stringent short-term shutdowns, said David Stubbs, head of investment strategy at J.P. Morgan Private Bank. “But we always knew this recovery would be stop-start: We won’t be truly moving into the main part of a new cycle until the health care issue itself is dealt with.”

Investors are watching this week’s talks in Congress for any indication on advances in the negotiations for a fiscal stimulus deal. House Speaker Nancy Pelosi told CNN on Sunday that she was expecting more answers on Monday and that an agreement could be reached this week among lawmakers. But Democrats and White House officials are blaming each other for the lack of progress after the two sides went into the weekend without a deal, dimming hopes for an agreement before Nov. 3.

Gold Slightly Weaker

(Kitco News, Mon. Oct. 26th, 2020)) – Gold futures prices are a bit lower in early U.S. trading Monday. The precious metals continue to trade in an inverse fashion with the daily movements of the U.S. dollar index, which is higher today. Losses in the yellow metal are limited to start the trading week, as U.S. and global stock markets see some selling pressure. December gold futureswere last down $0.90 at $1,904.30 and December Comex silver was last down $0.365 at $24.31 an ounce. 

Global stock markets were mostly down overnight. U.S. stock indexes are set to open the New York day session lower. Trader and investor attitudes are more downbeat to start the trading week, as the Covid-19 pandemic infections are on the rise in much of the world, including Europe and the U.S. Worries are increasing the new lockdowns are coming this winter, even though they may not be as extreme as seen last spring.

Recent Covid-19 stimulus package discussions between U.S. congressional Democrats and Republicans have failed to produce a deal, just a bit more than a week before the U.S.  elections. That’s also a negative for the stock markets.

Major central bank monetary policy meetings this week see the Bank of Canada Wednesday, and European Central Bank and Bank of Japan both meeting Thursday. Deflation has become a bigger concern in Europe.

The important outside markets early today see the U.S. dollar index higher. Nymex crude oil prices are lower and trading around $39.00 a barrel. The yield on the benchmark U.S. 10-year Treasury note is 0.81% today.

U.S. economic data due for release Monday includes the Chicago Fed national activity index, new residential sales, and the Texas manufacturing outlook survey.

Technically, the December gold futures bulls have the overall near-term technical advantage amid recent choppy and sideways trading. Bulls are working on a fledgling price uptrend. 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 Friday’s high of $1,917.30 and then at $1,925.00. First support is seen at today’s low of $1,892.50 and then at $1,885.00. Wyckoff’s Market Rating: 6.5

December silver futures bulls have the overall near-term technical advantage and are working on a price uptrend. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $27.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $22.965. First resistance is seen at the overnight high of $24.765 and then at $25.00. Next support is seen at $24.00 and then at $23.65. W