Rallying U.S. equities sink gold, silver markets

New York (Oct 16)  Gold and silver prices are solidly lower in midday U.S. trading Tuesday. A rally in the U.S. stock market is pressuring the precious metals today. December gold futures were last down $13.80 an ounce at 1,483.80. December Comex silver prices were last down $0.30 at $17.41 an ounce.

Risk aversion is not at all keen Tuesday despite traders and investors backing off on their initial upbeat assessment of the U.S.-China “Phase 1” trade agreement reached last week, and which has yet to be signed.

China's trade war with the U.S. brought more dour news on China's manufacturing front Tuesday. The world's second-largest economy saw its producer price index down 1.2% in September, year-on-year. Consumer price inflation rose 3% year-on-year in September, due to a surge in food prices at up 11%. The food rise was led by a more than 69% rise in pork prices due to the spreading African swine fever disease.

Germany's economy got more downbeat data Tuesday. The closely watched ZEW survey current situation index fell to -25.3 in October versus -19.9 in September, and -23.6 as the consensus forecast. The ZEW survey expectations index was -22.8 in October compared to -22.5 in September and
 -26.4 that was forecast.

There are geopolitical matters lingering not far from the front burner of the marketplace that could flare up at any time. Gold and silver bulls are biding their time.

Nymex crude oil prices are near steady and trading around $53.60 a barrel today. The other key “outside market” sees the U.S. dollar index slightly down in midday U.S. trading.

Technically, December gold futures prices were near the session low at midday, scored a bearish “outside day” down on the daily bar chart and closed at a two-week low close today. The bulls have the overall near-term technical advantage but a five-week-old downtrend is still in place on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,525.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the October low of $1,465.00. First resistance is seen at $1,500.00 and then at $1,508.00.

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