09/03/2019 | Safe-haven demand, weak U.S. data power gold, silver prices
Gold and silver prices are sharply higher in early-afternoon U.S. trading Tuesday. Silver futures hit a three-year high, while gold futures are poised to close at a six-year high close. More safe-haven buying interest amid heightened trader and investor anxiety in the world marketplace was featured today. Downbeat U.S. economic data also added to buying interest in the precious metals. December gold futures were last up $26.40 an ounce at 1,555.90. December Comex silver prices were last up $0.898 at $19.24 an ounce.
Some anemic U.S. economic data today saw the U.S. ISM August manufacturing purchasing managers index (PMI) come in at 49.1 versus 51.2 in July. A reading below 50.0 suggests contraction in the sector. Also, July U.S. construction spending came in at up a paltry 0.1% from June, which was also a miss to the downside. These reports fall into the camp of the monetary policy doves, who want to see the Federal Reserve lower interest rates.
China over the weekend filed a complaint with the World Trade Organization against the U.S. and its tariffs imposed on China. Meantime, President Trump today tweeted aggressive and challenging tweets aimed at China. These moves ratcheted up the trade war between the world’s two largest economies. The Chinese yuan dropped to an 11-year low against the U.S. dollar overnight, at near 7.2 to the dollar. The weaker yuan makes Chinese goods less expensive in U.S. dollar terms.
Civil unrest continues high in Hong Kong after another weekend of protesting. Reports said Hong Kong authorities are now considering declaring a state of emergency.
The British pound fell to a 34-year low against the greenback today amid turmoil in the U.K. over the British exit from the European Union (Brexit). The U.K. is presently set to leave the EU in October. New Prime Minister Boris Johnson is battling with his own party on the matter, as Johnson wants out of the EU in October, with no more extensions to negotiate a “soft” Brexit.
The key “outside markets” today see Nymex crude oil prices solidly down and trading around $53.50 a barrel. The U.S. dollar index is higher and hit a 27-month high overnight.
Technically, December gold futures prices closed nearer the session high today and closed at a six-year high close. The bulls have the strong overall near-term technical advantage. A three-month-old uptrend is in place on the daily bar chart. There are no early clues to suggest a market top is close at hand. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,600.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,500.00. First resistance is seen at today’s high of $1,558.90 and then at the August high of $1,565.00. First support is seen at $1,546.10 and then at $1,540.00. Wyckoff's Market Rating: 8.5
December silver futures prices closed nearer the session high today. The silver bulls still have the strong overall near-term technical advantage. A three-month-old uptrend is in place on the daily bar chart. There are no early chart clues to suggest a market top is close at hand. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $20.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $18.00. First resistance is seen at today’s high of $19.28 and then at $19.50. Next support is seen at $19.00 and then at $18.76. Wyckoff's Market Rating: 9.0.
December N.Y. copper closed down 240 points at 252.75 cents today. Prices closed near mid-range and hit a 2.5-year low today. The copper bears have the solid overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 265.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 240.00 cents. First resistance is seen at today’s high of 256.80 cents and then at last week’s high of 259.70 cents. First support is seen at 250.00 cents and then at today’s low of 248.20 cents. Wyckoff's Market Rating: 1.0.
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