Gold drops to 6-wk. low, silver 14.mo. low, as USDX surges

New York (Sept 29)  Gold prices are lower and hit a six-week low in midday U.S. trading Wednesday, as modest early gains were erased when the U.S. dollar index rallied to an 11-month high and the U.S. stock indexes recovered from Tuesday’s solid selling pressure, to somewhat reduce risk aversion in the marketplace. Silver prices were hammered to a 14-month low today. December gold futures were last down $12.70 at $1,724.80. December Comex silver was last down $0.947 at $21.515 an ounce.

Global stock markets were mixed in overnight trading, with Asian shares mostly weaker and European shares mostly up. U.S. stock indexes have recovered today, but are still wobbly after Tuesday’s sharp losses. Rising government bond yields and worries about energy shortages in major economies have the marketplace edgy. It also appears financial markets had a bit of a delayed reaction to last week’s FOMC meeting that saw the Federal Reserve lay the groundwork for tapering its monthly bond-buying program that has been in place for quite some time.

President Biden’s infrastructure package is set for a House of Representatives vote on Thursday. Meantime, the U.S. government’s funding will run out at midnight Thursday, which if not extended, would shut down part of the government Friday.

The key outside markets today see the U.S. dollar index solidly higher and hitting an 11-month high. Nymex crude oil futures are slightly lower and trading around $75.00 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.501%.

Technically, December gold futures bears have the firm overall near-term technical advantage. A three-week-old price downtrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at this week’s high of $1,760.90. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,700.00. First resistance is seen at today’s high of $1,746.00 and then at $1,750.00. First support is seen at $1,715.00 and then at $1,700.00.

KitocNews