Gold and silver prices are sharply lower and have it six-week lows in midday U.S. trading Monday. The metals met strong selling pressure amid bearish “outside markets” today that included solid gains in the U.S. dollar index and big losses in crude oil futures prices. As has been seen several times the past few months, the safe-haven metals could not catch a bid amid despite a global stock market sell off to start the trading week, including big losses in the U.S. stock indexes. October gold futures were last down $53.00 at $1,900.20 and December Comex silver was last down $2.484 at $24.64 an ounce.
Much of the raw commodity sector got hammered Monday. Weak-handed long liquidation was featured many commodity futures markets, including in gold and silver. For many traders and investors it was a case of the old market saying, “if you can’t sell what you want, you sell what you can,” likely linked in part to margin-call selling pressure across many markets.
Importantly, the gold market bulls now need to strongly defend the last reaction low in the near-term price uptrend, which is the August low of $1,865, basis October futures, to keep the uptrend alive and to avoid serious near-term technical damage being inflicted. The silver market bulls have seen their uptrend stall out as prices fell just below the August low of $23.80, basis December futures, to at least temporarily negate the near-term price uptrend in that market.
Risk aversion is indeed back in the marketplace to start the trading week, due to several matters. The death of U.S. Supreme Court justice Ruth Bader Ginsburg has thrown the U.S. Congress into turmoil regarding when a new justice will be voted upon. The intense debate and focus regarding such has apparently pushed a new U.S. economic stimulus package to the back burner. A significant rise in Covid-19 cases in Europe, and especially the U.K., has many thinking the Euro Zone could see many businesses go on lockdown again amid a “second wave” of infections. And, throw in rising U.S.-China trade and political tensions to make traders and investors even more anxious. Remember that this is the time of year when stock and financial markets can become more volatile. The U.S. stock indexes are having their worst month since March.
As reported above , the important outside markets today see the U.S. dollar index solidly higher and hitting a six-week high today. Nymex crude oil prices are solidly lower trading around $39.00. Meantime, the yield on the U.S. Treasury 10-year note is trading around 0.66% today.
U.S. economic data released Monday was light and included the Chicago Fed national activity index.
Technically, October gold futures bulls still have the overall near-term technical advantage but faded badly today and now need to step up and show fresh power very soon to avoid technical damage and to keep a five-month-old uptrend alive on the daily bar chart. Bulls’ next upside price objective is to produce a close in October futures above solid resistance at today’s high of $1,954.10. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the August low of $1,865.00. First resistance is seen at $1,920.50 and then at $1,930.00. First support is seen at today’s low of $1,878.50 and then at $1,865.00. Wyckoff’s Market Rating: 6.5
December silver futures bulls have the overall near-term technical advantage but faded badly today and need to show fresh power very soon to revive a five-month-old price uptrend that was in place on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at today’s high of $27.13 an ounce. The next downside price objective for the bears is closing prices below solid support at $22.50. First resistance is seen at $25.00 and then at $26.00. Next support is seen at today’s low of $23.78 and then at $23.50. Wyckoff’s Market Rating: 6.5.
December N.Y. copper closed down 855 points at 303.10 cents today. Prices closed near the session low today after hitting a 26-month high early on today. Prices also scored a bearish “outside day” down on the daily bar chart today. The copper bulls still have the firm overall near-term technical advantage as prices are in a six-month-old uptrend on the daily bar chart. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at the today’s high of 312.10 cents. The next downside price objective for the bears is closing prices below solid technical support at the August low of 279.60 cents. First resistance is seen at 305.00 cents and then at 307.50 cents. First support is seen at today’s low of 303.25 cents and then at 300.00 cents. Wyckoff’s Market Rating: 7.5.