More price pressure on gold, silver amid deteriorating charts

(Kitco News) – Gold and silver prices are weaker again in early U.S. trading Thursday, with gold hitting a three-week low. Technical selling is featured this week as the near-term chart postures for both metals have turned more bearish. Precious metals traders are also looking to the key outside markets for direction. Today, a firmer U.S. dollar index and a rise in U.S. Treasury yields are negatives for gold and silver. December gold was last down $5.40 at $1,952.40. December silver was last down $0.113 at $22.615.

Asian and European markets were mostly firmer in overnight trading. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. Risk appetite has crept back into the general marketplace recently amid no recent major escalation of violence in the Israel-Hamas war. However, my bias is still that this Middle East situation will deteriorate again to the point of roiling markets—and probably sooner rather than later.

In overnight news, China’s consumer and producer inflation slipped into deflationary territory last month, heightening expectations the world’s second-largest economy needs more government stimulus. China’s October consumer price index fell 0.2%, year-on-year, while the producer price index was down 2.6% in the same period. Food prices fell 4.0% in October, led by a 30% drop in pork prices. Pork is a main consumer staple in China. This latest China data is also a bearish element for the metals markets, as China is a major metals consumer.

The key outside markets today see the U.S. dollar index firmer. Nymex crude oil prices are a bit higher and trading around $75.75 a barrel. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.533%.

U.S. economic data due for release Thursday includes the weekly jobless claims report. Several Federal Reserve officials also are slated to speak today.

Technically, the gold futures bulls have slight the near-term technical advantage but are fading. A price uptrend on the daily bar chart has been negated. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $2,000.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at the overnight high of $1,959.80 and then at $1,970.00. First support is seen at the overnight low of $1,948.30 and then at $1,935.00. Wyckoff’s Market Rating: 5.5

The silver bears have the overall near-term technical advantage. Silver bulls’ next upside price objective is closing December futures prices above solid technical resistance at the October high of $23.88. The next downside price objective for the bears is closing prices below solid support at $21.50. First resistance is seen at the overnight high of $22.72 and then at $23.00. Next support is seen at this week’s low of $22.375 and then at $22.00. Wyckoff’s Market Rating: 4.0.

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