Gold, silver rebound as USDX backs off, crude oil rallies

Gold and silver prices are higher in midday U.S. trading Tuesday, on short covering in the futures markets and bargain hunting in the cash markets, following recent selling pressure. The key "outside markets" are also in a bullish daily posture for the metals today, as the U.S. dollar index backed off a bit and crude oil prices were solidly higher. October gold futures were last up $13.80 at $1,752.40. September Comex silver were last up $0.147 at $19.03 an ounce.

U.S. stock indexes are weaker at midday. Traders and investors early this week are concerned about a still-aggressive Federal Reserve that is fighting problematic price inflation by raising U.S. interest rates at a rapid pace--even if it causes a U.S. economic recession. A Wall Street Journal news headline read: "Wall Street swings from greed to fear as the Fed's message sinks in." The marketplace is awaiting the late-week Jackson Hole, Wyoming Federal Reserve annual symposium, including a speech from Fed Chairman Jerome Powell Friday morning. Past Jackson Hole Fed meetings have significantly moved markets.

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The key outside markets today see Nymex crude oil prices solidly higher and trading around $93.25 a barrel. The U.S. dollar index is weaker on a corrective pullback after hitting a nearly 20-year high in early U.S. trading. The surging greenback is denting bullish enthusiasm in many raw commodity markets, as they are priced in U.S. dollars on the world market. The appreciating greenback is making those commodities more expensive to purchase in non-U.S. currency. Meantime, the yield on the 10-year U.S. Treasury note is fetching 3.0%.

Technically, October gold futures bears still have the firm overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at $1,800.00. 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 today's high of $1,757.60 and then at 1,775.00. First support is seen at today's low of $1,733.80 and then at this week's low of $1,730.40. Wyckoff's Market Rating: 2.5.

September silver futures bears have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the August high of $20.87. The next downside price objective for the bears is closing prices below solid support at the July low of $18.01. First resistance is seen at last Friday's high of $19.48 and then at $20.00. Next support is seen at this week's low of $18.605 and then at $18.35. Wyckoff's Market Rating: 2.0.

September N.Y. copper closed up 380 points at 368.95 cents today. Prices closed nearer the session high and hit a seven-week high today. The copper bulls have the overall near-term technical advantage. Prices are in a five-week-old uptrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 400.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 335.00 cents. First resistance is seen at today's high of 373.15 cents and then at 380.00 cents. First support is seen at this week's low of 360.40 cents and then at last week's low of 354.20 cents. Wyckoff's Market Rating: 6.0.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips