Price pressure on gold, silver, as charts turn more Bearish

Gold and silver prices are solidly lower in early U.S. trading Thursday. Gold prices hit a four-week low and silver a three-week low. The near-term chart postures for both metals have deteriorated this week, which is inviting the shorter-term futures traders to play the short side of the markets. October gold futures were last down $21.70 at $1,770.90. December Comex silver was last down $0.446 at $23.355 an ounce.

Global stock markets were mostly weaker in overnight trading. The U.S. stock indexes are pointed to modestly lower openings when the New York day session begins. Global shares saw some price pressure Thursday due in part to worries about an economic slowdown in China, the world’s second-largest economy. Reports coming out of China say giant property developer China Evergrande Group has serious debt problems that could be just the tip of the iceberg for China’s housing sector that plays a big role in China’s economic growth.

It’s a busy day for U.S. economic data, highlighted by the retail sales report for August, seen down 0.8% from July after a 1.1% drop seen in the July report. Retail sales the last few weeks have taken a hit due to the Covid variant that is still impacting much of the U.S.

The key outside markets today see the U.S. dollar index higher, which is also a negative for the metals markets. Nymex crude oil futures prices are near steady and trading around $72.50 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.307%.

Other U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, manufacturing and trade inventories and Treasury international capital data.

Technically, October gold futures bulls have lost their slight overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the July high of $1,836.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,750.00. First resistance is seen at $1,785.00 and then at today’s high of $1,795.10. First support is seen at today’s low of $1,770.80 and then at $1,760.00. Wyckoff's Market Rating: 5.0.

The silver bears have the firm overall near-term technical advantage and gained more power today. Silver bulls' next upside price objective is closing December futures prices above solid technical resistance at $24.50 an ounce. The next downside price objective for the bears is closing prices below solid support at the August low of $22.35. First resistance is seen at $24.00 and then at $24.345. Next support is seen at today’s low of $23.31 and then at $23.00. Wyckoff's Market Rating: 3.0.

By Jim Wyckoff

For Kitco News

Buy and sell Gold and Silver including Free Storage