Gold Rises on Safe-Haven Buying, Silver Dips Worryingly
Gold prices edged higher in early U.S. trading on Tuesday. Safe-haven buying kept the gold price not far below recent historical highs. Silver prices fell. Specifically, a weakening dollar and still very tense geopolitical situation in the Middle East are providing support for gold and silver markets. An escalation of tensions in the Middle East could accelerate the flight to safety in the asset market - allowing gold and silver bulls to continue in the race. December gold rose $4.70 to $2,670.70, while December silver fell $0.354 to $31.65.
Asian and European stocks fluctuated overnight. Chinese stocks reopened after an extended public holiday. U.S. stock indices opened higher at the start of trading in New York.
Broker SP Angel said that the much-anticipated economic briefing by China's National Development and Reform Commission on Tuesday "did not impress the market, as it provided little in the way of new stimulus measures." This news triggered a sell-off in Chinese stock indices, with the Hang Seng Index in Hong Kong falling nearly 10%, marking the largest single-day drop in nearly two years.
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Today's main external market sees the U.S. Dollar Index as somewhat weaker. Crude oil prices at the New York Mercantile Exchange fell after touching a 2.5-month high overnight and are currently trading at about $75.75 a barrel. The benchmark 10-year U.S. Treasury yield is currently at 3.996%.
U.S. economic data released on Tuesday includes the NFIB Small Business Index, International Trade Report, weekly Johnson Redbook Retail Sales Report, and RCM/TIPP Economic Optimism Index.
Technical Analysis of Gold and Silver
Technically, December gold bulls have a strong overall short-term technical advantage. The next upward target for the bulls is to close above the solid resistance level of $2,800.00. The next near-term downside price target for the bears is to push futures prices below the solid technical support level of $2,600.00. First resistance is seen at this week's high of $2,679.20, followed by last Friday's high of $2,690.60. The first support is at $2,650.00, followed by $2,646.20. Our market rating: 8.5.
Technically, December silver futures bulls have a solid near-term overall technical advantage. On the daily bar chart, prices are in a seven-week uptrend, but the bulls need to show new strength soon to maintain momentum. The next upward target for bullish silver is to break through the solid technical resistance level of $33.50 on closing prices. The next downside price target for the bears is to close below the solid support level of $30.00. First resistance is at $32.00, followed by this week's high of $32.595. The next support is expected at the overnight low of $31.23, followed by $31.00.
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