Sharp price gains for gold on short covering, bargain hunting

New York (Sept 30)  Gold and silver prices are solidly up in midday U.S. trading Thursday, on good corrective rebounds after gold hit a six-week low and silver a 14-month low on Tuesday. Short covering by the shorter-term futures traders was seen today, as well as some bargain hunting after the recent dip. A sell off in the U.S. stock market today also prompted a bit of safe-haven demand for the metals. December gold futures were last up $36.20 at $1,759.20. December Comex silver was last up $0.51 at $21.995 an ounce.

Risk aversion had abated a bit late this week—until the U.S. stock indexes solid off in morning dealings Thursday. The historically turbulent month of September is ending Thursday, with the month showing traders and investors a bumpy ride. Many are wondering if the also historically rocky month of October could show more of the same, or worse.

Thursday is the last trading day of the month and of the quarter, which makes it an extra important trading day from a technical perspective.

The key outside markets today see the U.S. dollar index near steady after hitting a 12-month high overnight. Nymex crude oil futures are higher and trading around $75.75 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching around 1.52%.

Technically, December gold futures bears still have the overall near-term technical advantage. A four-week-old price downtrend is still in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,788.40. 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 $1,765.00 and then at $1,775.00. First support is seen at $1,750.00 and then at $1,740.00. Wyckoff's Market Rating: 3.5

KitcoNews