Gold, silver bounce as USDX, Treasury yields decline today

Gold and silver prices are higher and near daily highs in midday U.S. trading Wednesday, on short covering in the futures markets and perceived bargain hunting in the cash markets, following recent losses. The U.S. dollar index and U.S. Treasury yields backed down from their higher levels today, which also encouraged some buying interest in the metals markets. However, a big drop in crude oil prices to an eight-month low today did limit the upside in the precious metals. October gold was last up $11.50 at $1,714.90 and December silver was up $0.352 at $18.26.

U.S. stock indexes are higher at midday but still trending down on the daily charts. Risk aversion remains somewhat elevated in the general marketplace. China reported today its imports and exports fell more than the trade expected in August as the world's second-largest economy continues to stall amid Covid lockdowns, a wobbly property market and a weaker yuan. "The headwinds facing the Chinese economy are becoming increasingly fierce and recent efforts to shore it up have appeared inadequate," said an email dispatch from analyst Craig Erlam with OANDA.

The Bank of Canada monetary policy meeting today saw the central bank raise interest rates by 75 basis points. The European Central Bank meets Thursday and many expect the ECB to raise its main interest rate by 75 basis points.

Gold bears remain in control as short squeeze runs out of momentum

The key outside markets today see Nymex crude oil prices sharply lower and trading around $82.65 a barrel. The U.S. dollar index is a bit weaker after hitting another 20-year high in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching around 3.2%.

Technically, October gold futures bears still have the solid overall near-term technical advantage. Prices are in a four-week-old downtrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at $1,750.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the July low of $1,686.30. First resistance is seen at this week's high of $1,727.00 and then at $1,740.00. First support is seen at $1,700.00 and then at $1,686.30. Wyckoff's Market Rating: 2.0.

December silver futures bears still have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $19.50. The next downside price objective for the bears is closing prices below solid support at $17.00. First resistance is seen at this week's high of $18.465 and then at $18.80. Next support is seen at today's low of $17.74 and then at last week's low of $17.40. Wyckoff's Market Rating: 2.0.

December N.Y. copper closed down 345 points at 342.70 cents today. Prices closed near mid-range today. The copper bears have the firm overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the August high of 378.35 cents. The next downside price objective for the bears is closing prices below solid technical support at the July low of 315.55 cents. First resistance is seen at this week's high of 350.00 cents and then at 360.00 cents. First support is seen at this week's low of 336.10 cents and then at 330.00 cents. Wyckoff's Market Rating: 3.0.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips