Comex gold prices are modestly higher in early trading Tuesday, supported by some bargain hunters stepping in to “buy the dip” in prices. A weaker U.S. dollar versus the other major world currencies is also supportive for the precious metals early Tuesday. The gold and silver market bulls needed to step up and show some strength in order to avoid serious chart damage being inflicted. December gold last traded up $6.30 at $1,743.90 an ounce. Spot gold was last quoted up $4.70 at $1,742.75. December Comex silver last traded up $0.252 at $32.995 an ounce.
Precious metals traders are awaiting the day’s fresh batch of U.S. economic data for direction. U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales data, the consumer price index, Treasury international capital data, industrial production and capacity utilization, and the NAHB housing market index.
In overnight news, European Union economic data showed Euro zone inflation was unchanged in September, at a 2.6% annual rate. The German ZEW economic expectations index rose in September, suggesting less risk for the German economy. The market place is awaiting the latest GDP report from China, due out Thursday. EU officials will also meet in Brussels Thursday to once again discuss the EU debt crisis. The Euro currency did get some support Tuesday on reports Spanish officials may be considering making a formal request to the EU for financial assistance.
This week is “LME week” in London, whereby the London Metals Exchange hosts a series of meetings and events. Many major world metals traders will spend the week in London.
The U.S. dollar index is trading solidly lower Tuesday morning. The U.S. dollar bears have the overall near-term technical advantage. Meantime, Nymex crude oil prices are slightly higher early Tuesday morning. Crude oil bulls and bears are on a level near-term technical playing field. These two key “outside markets” will continue to have a significant daily influence on gold and silver prices.
The London A.M. gold fixing is $1,737.50 versus the previous P.M. fixing of $1,736.00.
Technically, gold futures bulls have faded a bit as prices hit a fresh four-week low on Monday and at least temporarily negated a three-month-old uptrend on the daily bar chart. Bulls need to show more power soon. The gold bulls’ next upside price breakout objective is to produce a close above solid technical resistance at $1,775.00. Bears’ next near-term downside price objective is closing prices below solid technical support at $1,720.00. First resistance is seen at $1,750.00 and then at Monday’s high of $1,755.50. First support is seen at the overnight low of $1,731.60 and then at Monday’s low of $1,729.70.
December silver futures are also seeing bargain hunting Tuesday, after prices hit a fresh four-week low on Monday. Silver bulls have also faded and need to show more power soon. A 10-week-old uptrend on the daily bar chart has been negated. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $34.38 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $32.00. First resistance is seen at $33.25 and then at Monday’s high of $33.47. Next support is seen at Monday’s low of $32.57 and then at $32.25.
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