Gold and silver see some price pressure ahead of key U.S. data

October 29, 2020

New York (Oct 29)  Gold and silver futures prices are weaker in early U.S. trading Thursday. The precious metals have been hit by a stronger U.S. dollar index this week. The precious metals have not seen much safe-haven demand amid a U.S. stock market that has become wobbly this week. December gold futures were last down $4.50 at $1,874.40 and December Comex silver was last down $0.194 at $23.16 an ounce.

There is important U.S. economic data due for release Thursday morning, including the weekly jobless claims report, which is forecast to show a rise of around 780,000 claims. The advance third-quarter GDP estimate is forecast up a record 32% from the second quarter. Pending home sales for September are seen up 3.0%.

Global stock markets were mixed overnight. U.S. stock indexes are set to open the New York day session firmer on a corrective bounce from Wednesday’s sharp losses. More and more, traders and investors are taking a very dim view of the Covid-19 prospects over the coming winter. Europe is on a worse trajectory than the U.S., but health experts say the U.S. is about four weeks behind Europe. France is on complete lockdown for the second time this year, while other European countries are in varying degrees of increasing business shutdowns. Concerns about the approaching U.S. presidential election and the transfer of power if Joe Biden wins are also in the marketplace.

It’s a very busy day for U.S. corporate earnings, including heavyweights Apple, Alphabet, Facebook, Amazon and Twitter.

The European Central Bank and Bank of Japan both met Thursday. The BOJ kept its monetary policy unchanged. The ECB meeting was still in progress as of this writing.

The important outside markets early today see the U.S. dollar index firmer as the greenback bulls are having a good week. Nymex crude oil prices are lower and hit a 4.5-month low, trading around $35.85 a barrel. The breakdown in crude oil prices this week, which produced serious technical damage on the charts, is a significantly bearish omen for the entire raw commodity sector. The yield on the benchmark U.S. 10-year Treasury note is 0.78% today..]

Technically, the December gold futures bulls have the overall near-term technical advantage but are fading. 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 $1,885.10 and then at $1,900.00. First support is seen at this week’s low of $1,869.10 and then at $1,851.00. Wyckoff's Market Rating: 6.0

December silver futures bulls have the overall near-term technical advantage but a price uptrend on the daily bar chart has been negated and bulls need to show fresh power soon. Silver bulls' next upside price objective is closing prices above solid technical resistance at the October high of $25.71 an ounce. The next downside price objective for the bears is closing prices below solid support at the September low of $21.81. First resistance is seen at the overnight high of $24.58 and then at this week’s high of $24.765. Next support is seen at the October low of $22.965 and then at $22.50.


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