Buckle Up! Gold Gains As Volatile Trading Day Expected

(Kitco News) - Gold prices aremoderately higher in early U.S. trading Friday, on more safe-haven buying aheadof a likely volatile trading session in the U.S. stock market, and an uncertainweekend on the geopolitical front. December gold futures were last up $3.00 anounce at $1,235.00. December Comex silver was last down $0.005 at $14.625 anounce.

TheU.S. economic highlight this week is this morning's first estimate of third-quarterGDP, which came in at up a solid 3.5%. GDP was forecast at up 3.4% in the thirdquarter, on an annual basis. Gold prices down-ticked just slightly on the news,but quickly rebounded to pre-report levels.

Globalstock markets were mostly lower overnight. U.S. stock indexes are pointedtoward sharply lower openings when the New York day session begins. It's likelygoing to be another volatile day during the U.S. trading session today.Disappointing earnings reports from Amazon and Alphabet stocks are helping topress the U.S. equities lower.

Thereare near-term technical clues the U.S. stock indexes have put in near-termmarket tops, if not major tops. If that's indeed the case, it's a bullish elementfor hard assets like the precious metals and other raw commodities. Today willbe an extra important trading day for U.S. stock indexes. Solid losses to endthe week will further exacerbate trader and investor anxiety heading into anuncertain weekend. A big rally in U.S. stocks today would assuage themarketplace anxiety to some degree.

Tradersand investor can point to no single factor that is spooking the worldmarketplace in late October. There are ongoing geopolitical concerns thatinclude the U.S.-China trade war, U.S.-Saudi Arabia tensions over the murderedSaudi journalist, and Italy's defiance over forming its budget to meet EuropeanUnion rules. It's not going to be surprising to see some fresh news on one ofthese fronts in the next few days.

TheChinese yuan fell to a multi-year low versus the U.S. dollar overnight. TheU.S. is worried China is devaluing its currency to gain trade advantages.

Inother overnight news, the European Union got more dour economic news today whenthe European Central Bank's survey of professional forecasters reported weakereconomic projections for the Euro zone in the coming years. The surveyprojected a 2.0% GDP gain this year and 1.8% growth in 2019.

Thekey outside markets today find the U.S. dollar index firmer and hovering nearthis week's nine-week high. Look for the greenback to remain supported onsafe-haven demand amid wobbly world stock markets. Meantime, November Nymexcrude oil prices are lower and trading around $66.50 a barrel. Oil prices fellto a two-month low earlier this week, on worries about slowing world economicgrowth, due in part to the U.S.-China trade war.

OtherU.S. economic data due for release Friday includes the University of Michiganconsumer sentiment survey.

Technically,gold bulls have the near-term technical advantage. Bulls' next upside priceobjective is to produce a close in December futures above solid resistance at $1,275.00.Bears' next near-term downside price breakout objective is pushing prices belowsolid technical support at $1,220.00. First resistance is seen at this week's highof $1,243.00 and then at $1,250.00. First support is seen at $1,228.00 and thenat $1,220.00. Wyckoff's Market Rating: 6.0

Decembersilver futures bears still have the overall near-term technical advantage.Silver bulls' next upside price breakout objective is closing prices abovesolid technical resistance at $15.00 an ounce. The next downside price breakoutobjective for the bears is closing prices below solid support at the Septemberlow of $13.965. First resistance is seen at last week's high of $14.88 and thenat the October high of $14.95. Next support is seen at this week's low of$14.54 and then at the October low of $14.255. Wyckoff's Market Rating: 4.0.

By Jim Wyckoff

For Kitco News

Follow @jimwyckoffjwyckoff@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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