Gold and silver weaker despite big sell off in U.S. stock mkt.

September 3, 2020

New York (Sept 3)  Gold and silver prices prices are moderately down in midday U.S. trading Wednesday, pressured by a rebound in the U.S. dollar index late this week after it hit a two-year low earlier in the week. Also, lower crude oil prices that dropped to a four-week low today are a bearish outside market force working against the precious metals bulls. The safe-haven metals bulls are a bit perplexed by their metals’ inability to rally today in the face of a big sell off in the U.S. stock market. However, metals did come off their daily lows as U.S. equities dropped. October gold futures were last down $6.80 at $1,930.10. December Comex silver prices were last down $0.395 at $27.00 an ounce.

This morning’s weekly jobless claims report showed new claims of 881,000, which was below expectations for a rise of 950,000. Gold and silver prices ticked down after the better-than-expected jobless claims reading. Traders are now awaiting Friday’s employment situation report for August from the U.S. Labor Department, expected to show non-farm payrolls gains of around 1.3 million.

Global stock markets were mixed overnight. The Nasdaq and S&P 500 hit record highs Wednesday and were due for normal corrective pullbacks in their existing uptrends. There also may be a bit more risk aversion in the marketplace Thursday, on reports the U.S. will impose restrictions on its Chinese diplomats, in retaliation for China doing the same to its U.S. diplomats.

On the bright side, the London Financial Times reported the Covid-19 herd immunity may be closer than previously thought. The story said tests for antibodies may be dramatically underestimating the proportion of people who have been infected with the virus, according to scientists. Other reports also said U.S. health officials are saying a vaccine could be ready for distribution by November 1.

The important outside markets today see Nymex crude oil prices weaker and hitting a four-week low--trading around $41.25 a barrel. The U.S. dollar index is higher again today on a corrective bounce after hitting a two-year low Tuesday. The yield on the U.S. Treasury 10-year note is trading around 0.62% today.

Technically, October gold futures bulls still have the firm overall near-term technical advantage amid recent choppy trading. Prices are still in a five-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in October futures above solid resistance at this week’s high of $1,992.50. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at today’s high of $1,948.40 and then at Wednesday’s high of $1,972.40. First support is seen at today’s low of $1,919.70 and then at $1,915.00. Wyckoff's Market Rating: 7.0

December silver futures bulls have the firm overall near-term technical advantage amid a five-month-old price uptrend still in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at this week’s high of $29.235 an ounce. The next downside price objective for the bears is closing prices below solid support at $25.00. First resistance is seen at $27.50 and then at today’s high of $27.89. Next support is seen at today’s low of $27.01 and then at $26.50.


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