Gold and silver see price gains amid weaker greenback
New York (Oct 19) Gold and silver futures prices are higher in early U.S. trading Monday. Support comes from a weaker U.S. dollar index to start the trading week. The charts remain overall friendly and that is also inviting some bulls to the buy side. December gold futures were last up $9.60 at $1,916.00 and December Comex silver was last up $0.555 at $24.95 an ounce.
Global stock markets were mixed overnight. U.S. stock indexes are set to open the New York day session higher. Trader and investor risk appetite is more upbeat to start the trading week, on renewed hopes for an agreement between U.S. congressional Democrats and Republicans on a stimulus package for Americans. House Speaker Nancy Pelosi over the weekend set a Tuesday deadline for an agreement with the White House. President Trump said he is closer to Democrats' demands for a larger overall package than congressional Republicans. The Senate Wednesday plans to vote again on a $500 billion coronavirus aid package.
There was also upbeat economic data coming out of China, as its economy in the third quarter grew by 4.9%, which was slower than expected but still considered a good recovery from the business lockdowns experienced earlier in the year. China remains the fastest-recovering major economy, after the lockdowns.
Reports said new legislation passed Saturday enables the Chinese government to restrict rare earth mineral exports to foreign companies and nations. China had already been using access to rare earth minerals and other materials to persuade companies to set up manufacturing in China. However, the passing of official legislation on the matter marks an escalation of the strategy to control critical commodity markets and gain the upper hand on Western manufacturing. The legislation also applies to advanced technologies required by manufacturers such as LEDs, where China dominates global supply. The new law takes effect December 1.
The important outside markets early today see the U.S. dollar index lower. Nymex crude oil prices are modestly lower and trading around $40.60 a barrel. The yield on the benchmark U.S. 10-year Treasury note is 0.78% today.
U.S. economic data due for release Monday is light and includes the NAHB housing market index. Fed Chairman Powell also speaks today at an International Monetary Fund forum.
Technically, the December gold futures bulls have the overall near-term technical advantage amid recent choppy and sideways trading. 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 $1,925.00 and then at $1,930.60. First support is seen at $1,900.00 and then at last week’s low of $1,885.00.
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