Gold down but pares early losses; silver rebounds
NEW YORK (October 28) Gold prices are lower in midday U.S. trading Tuesday, on some follow-through selling pressure from Monday’s steep losses. However, the gold market bulls have clawed back about half of the losses seen in overnight trading. Both gold and silver hit three-week lows overnight. Silver prices are posting gains on a corrective bounce from the recent strong selling pressure. December gold was last down $39.20 at $3,980.50. December silver prices were up $0.471 at $47.245.
Serious near-term technical chart damage has been inflicted in both gold and silver to suggest near-term market tops are in place.
The Federal Reserve’s Open Market Committee meeting began this morning and ends Wednesday afternoon with a statement and press conference from Fed Chairman Powell. The FOMC is widely expected to deliver a second straight 0.25% interest-rate cut to boost the U.S. job market. Fed policymakers are divided, however, with some worrying that cutting rates will go too far and others supporting even further reductions, all amid the lack of U.S. government economic data releases during the federal government shutdown.
U.S. stock indexes at record highs; bulls see more upside. ”Equity bulls are lining up to wager the S&P 500 will surge past 7,000 now that it looks as if a seasonal bout of volatility has passed,” said a Bloomberg report today. The index powered to a record 6,875.00 Monday, buoyed by positive signs on trade, expectations for a U.S. interest rate cut and strong corporate earnings. “With that macro backdrop in place, bulls are pointing to other factors that can take the index past the psychologically important 7,000 level. Fund flows show retail and institutional investors pouring into the market, while technical analyses show little resistance ahead of the round-number milestone. In a seasonal quirk, the current week stands out as the best for stocks over the past 75 years,” said Bloomberg. The rallying stock market has been bearish for safe-haven gold and silver.
The key outside markets today see the U.S. dollar index a bit weaker. Crude oil prices are down and trading around $59.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 3.978%.
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