(Kitco News) - Gold prices are modestly lower in early U.S. trading Monday. With a lack of new fundamental, markets-moving information in the marketplace just the past few days, the overall bearish chart posture for gold is allowing the market to now drift sideways to lower. December Comex gold was last down $2.80 an ounce at $1,264.80. December Comex silver was last up $0.127 at $17.615 an ounce.
The key “outside markets” on Monday are in a neutral posture for the precious metals markets. The U.S. dollar index is slightly lower on profit taking after hitting a seven-month high overnight. The recent strong greenback is somewhat limiting buying interest in the raw commodity markets. Meantime, Nymex crude oil prices are weaker on reports that said Iraq said it wants to be excluded from any OPEC oil-production-cut deal. Nymex crude oil futures are trading just above $50.00 a barrel.
Global equity markets were mostly firmer Monday, ahead of a busy week of U.S. corporate earnings reports. Two big U.S. companies are merging it was announced over the weekend, as AT&T intends to purchase Time-Warner. European equities were lifted in part by improving banking sector stocks. Asian stock markets were helped by a rally in Japan’s Nikkei stock index after some slightly upbeat import and export data was released in Japan. U.S. stock indexes are pointed toward higher openings when the New York day session begins.
In other overnight news, the Euro zone Markit purchasing managers index (PMI) rose to 53.7 in October from 52.6 in September. The October reading was a 10-month high. A number above 50.0 suggests expansion in the sector.
Federal Reserve Bank of Chicago President Charles Evans speaks Monday at a luncheon in Chicago.
U.S. economic data due for release Monday includes the Chicago Fed national activity index and the U.S. flash manufacturing PMI.
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Wyckoff’s Daily Risk Rating: 2.5 (Trader and investor market risk aversion is not elevated today.)
(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 5, with 1 being least risk-averse (most risk-on) and 5 being the most risk-averse (risk-off).
Technically, December gold futures bears have the overall near-term technical advantage. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at the October low of $1,243.20. First resistance is seen at $1,270.00 and then at last week’s high of $1,275.90. First support is seen at Friday’s low of $1,261.70 and then at last week’s low of $1,251.10. Wyckoff’s Market Rating: 4.0
December silver bears have the overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing futures prices above solid technical resistance at $18.46 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.00. First resistance is at last week’s high of $17.79 and then at $18.04. Next support is seen at last week’s low of $17.315 and then at the October low of $17.115. Wyckoff's Market Rating: 3.5.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
