Steep price losses for gold and silver as greenback gains

New York (Oct 28)  Gold and silver futures prices are solidly lower in early U.S. trading Wednesday. The precious metals are again being pressured by a stronger U.S. dollar index on this day. Much to the consternation of the bulls, the safe-haven metals can’t catch a bid at mid-week despite the keener risk aversion in the marketplace. Once again the shorter-term gold futures traders are paying more attention to the daily movements of the U.S. dollar index. December gold futures were last down $21.50 at $1,890.20 and December Comex silver was last down $0.62 at $23.97 an ounce.

Global stock markets were mixed but mostly lower overnight. U.S. stock indexes are set to open the New York day session solidly down. Rising Covid-19 pandemic infections in the U.S. and Europe, as well as other parts of the world, are fanning worries new lockdowns are coming this winter, even though they may not be as extreme as seen last spring. Europe is already starting to ramp up its quarantine of some business activities. Concerns about the U.S. presidential election and the transfer of power if Joe Biden wins are also in the marketplace. No new U.S. government financial stimulus package for American citizens is in sight and that’s also adding to downbeat attitudes in the stock markets.

Major central bank monetary policy meetings this week see the Bank of Canada Wednesday, and European Central Bank and Bank of Japan both meeting Thursday. Deflation has become a bigger concern in Europe.

The important outside markets early today see the U.S. dollar index solidly higher. Nymex crude oil prices are solidly lower and trading around $38.00 a barrel. The yield on the benchmark U.S. 10-year Treasury note is 0.76% today.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the advance economic indicators report, and the weekly DOE liquid energy stocks report.

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 this week’s high of $1,913.80 and then at $1,925.00. First support is seen at $1,885.00 and then at the October low of $1,877.10.

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