Modest price gains for gold and silver as USDX weakens

New York (Oct 27)  Gold and silver futures prices are firmer in midday U.S. trading Tuesday. Modest support comes from a weaker U.S. dollar index today. The precious metals are also pausing ahead of what is arguably the most important event of the trading year—the U.S. elections in one week. Many markets could be on hold until after the presidential election results are in. Many traders will want to step away from the markets, or take some risk off the table, due to the still highly uncertain outcome of the presidential election. Gold and silver could see some better safe-haven demand in the coming days, heading into the elections. December gold futures were last down $1.00 at $1,904.70 and December Comex silver was last up $0.02 at $24.44 an ounce.

Global stock markets were mostly weaker Tuesday. U.S. stock indexes are mixed at midday. The global marketplace remains jittery as Covid-19 pandemic infections are on the rise in much of the world, including Europe and the U.S. There are worries new lockdowns are coming this winter, even though they may not be as extreme as seen last spring. Europe is already starting to ramp up its quarantine of some business activities. No vaccine for the virus is close to being released for general distribution.

Major central bank monetary policy meetings this week see the Bank of Canada Wednesday, and European Central Bank and Bank of Japan both meeting Thursday. Deflation has become a bigger concern in Europe.

The important outside markets early today see the U.S. dollar index modestly down. Nymex crude oil prices are higher and trading around $39.40 a barrel. The yield on the benchmark U.S. 10-year Treasury note is 0.8% today.

Technically, December gold futures bulls have the overall near-term technical advantage but trading has been choppy as bulls have not shown the power needed to sustain a price uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at the October high of $1,939.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the September low of $1,851.00. First resistance is seen at last Friday’s high of $1,917.30 and then at $1,925.00. First support is seen at this week’s low of $1,892.50 and then at $1,885.00.

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