Price pullbacks for gold and silver as USDX rebounds

New York (Oct 22)  Gold and silver futures prices are moderately down in early U.S. trading Thursday, as both metals continue to trade in an inverse fashion with the daily movements of the U.S. dollar index, which is higher today on a corrective bounce after hitting a six-week low Wednesday. The safe-haven gold and silver bulls continue to be perplexed their metals can’t catch a bid when the U.S. stock indexes start to wobble a bit. December gold futures were last down $13.80 at $1,915.70 and December Comex silver was last down $0.326 at $24.91 an ounce.

Global stock markets were mixed overnight, with Asian shares mostly weaker and European shares mostly firmer. U.S. stock indexes are set to open the New York day session slightly weaker. Risk appetite among traders and investors has waned recently. Covid-19 stimulus package discussions between congressional Democrats and Republicans continue, even after House Speaker Pelosi’s stated deadline for a deal has passed. The window is rapidly closing on any deal reached and implemented before the U.S. election in early November.

Reports say Goldman Sachs is forecasting a commodity market bull run stoked by inflation and new demand driven by additional fiscal and monetary stimulus by the world’s major economies. Goldman also reportedly forecast a return of 28% over the next 12 months on their commodity index, though the firm said individual commodities are likely to perform much better. This news comes as today it was announced Goldman was fined $350 million by Hong Kong securities and futures regulators over “serious lapses and deficiencies.” So, Goldman’s bull market forecast for commodities makes many veteran market watchers wonder if the firm just “talking their book.”

The important outside markets early today see the U.S. dollar index higher on a corrective bounce after hitting a six-week low Wednesday. Nymex crude oil prices are higher and trading around $40.25 a barrel. The yield on the benchmark U.S. 10-year Treasury note is 0.81% today.

U.S. economic data due for release Thursday includes the weekly jobless claims report, existing home sales, leading economic indicators, and the Kansas City Fed manufacturing survey.

Technically, the December gold futures bulls have the overall near-term technical advantage amid recent choppy and sideways trading. Bulls are working on a fledgling price uptrend. 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 the overnight high of $1,929.40 and then at this week’s high of $1,936.00. First support is seen at Wednesday’s low of $1,911.60 and then at $1,900.00. Wyckoff's Market Rating: 6.5

December silver futures bulls have the overall near-term technical advantage and are working on a price uptrend. Silver bulls' next upside price objective is closing prices above solid technical resistance at $27.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $22.965. First resistance is seen at this week’s high of $25.425 and then at the October high of $25.71. Next support is seen at Wednesday’s low of $24.775 and then at $24.405.

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