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Gold, silver prices back off a bit, but more upside likely



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(Kitco News) – Gold and silver prices are modestly lower in the early U.S. trading Tuesday, on some corrective pressure following Monday's gains. Still, look for more safe-haven demand in the near term after the weekend terrorist drone strike that crippled Saudi Arabia's oil industry. The U.S. and Saudi Arabia are not likely to just sit on their hands, which will keep anxiety in the world marketplace. December gold futures were last down $ 2.80 an ounce at 1

,508.60. December Comex silver prices were last down $ 0.091 at $ 17.935 an ounce.

Asian and European stock markets were mixed mostly to overnight. U.S. stock indexes are pointing towards lower openings when the New York day session begins. Risk aversion is still keen on the marketplace Tuesday, following the weekend terrorist drone attacks on Saudi Arabian oil installations. The U.S. says the attacks were launched by Iran. The attack was the biggest hit to global crude oil production in modern history. Now, the world awaits the response from the U.S. It seems unlikely President Trump will let Iran get way with the attack without serious U.S. military impunity. U.S. Officials are headed to Saudi Arabia to confer with the Kingdom.

The other big markets event taking place this week is the Federal Reserve's Open Market Committee (FOMC) meeting that begins Tuesday morning and ends Wednesday afternoon with a statement. The FOMC will be lower the U.S. widely considered interest rates by 0.25%. President Trump has been browsing the Fed recently to get on the stick and lower interest rates to make the U.S. more competitive with other nations on trade. The spike in oil prices this week may throw a monkey wrench into central banks' monetary policies, which had heretofore been leaning very easy. Sharply higher oil prices immediately raised the specter of rising inflation, which could hamstring central banks' monetary policy easing in efforts to jumpstart or sustain their economic growth.

The marketplace was somewhat disappointed China's central bank did not move more aggressively to ease its monetary policy Tuesday, followed by some weak economic data for the country released this week. However, China's central bank could soon follow any U.S.

Nymex crude oil prices are around $ 62.00 a barrel. The other key outside the market today sees the U.S. dollar index slightly up.

U.S. economic data due for release Tuesday includes the Goldman Sachs and Johnson Redbook retail sales reports, industrial production and utilization capacity, and the NAHB housing market index.

 Live 24 hours gold chart [Kitco Inc.]

Technically, The gold bulls have a solid overall near-term technical advantage and are keeping alive a three-month-old uptrend on the daily bar chart. The Bulls' next upside price objective is to produce a close in October futures above solid resistance at the September high of $ 1,566.20. The Bears' next near-term downside price breakout objective is pushing December futures prices below solid technical support at $ 1,485.00. First resistance was seen at Monday's high of $ 1,519.70 and then at 1,525.00. First support was seen at $ 1,500.00 and then at the September low of $ 1,492.10. Wyckoff's Market Rating: 7.0

 Live 24 hours silver chart [ Kitco Inc. ]

December silver futures bulls still have the overall near-term technical advantage. However, a three-month-old uptrend on the daily bar chart is in jeopardy. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at last week's high of $ 18,555 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $ 17.00. First resistance was seen at Monday's high of $ 18.075 and then at last Friday's high of $ 18.265. Next support is seen at Monday's low of $ 17.69 and then at last week's low of $ 17.47. Wyckoff's Market Rating: 6.5.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article does not accept culpability for losses and / or damages resulting from the use of this publication.


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