Gold Pulls Back As Risk Aversion Recedes A Bit
(Kitco News) - Gold prices aremoderately lower in early U.S. trading, on a normal corrective pullback aftergood gains Tuesday that pushed prices to a nearly three-month high. Also, thereis a modest uptick in investor risk appetite at mid-week. December gold futures were last down $7.50 an ounce at $1,229.30. December Comex silver was last down$0.073 at $14.715 an ounce.
Globalstock markets were mixed to firmer overnight, rebounding from solid lossesTuesday. U.S. stock indexes are pointed toward lower openings when the New Yorkday session begins.
TheS&P 500 stock index on Tuesday dropped below what was strong chart supportat its October low. Such suggests a new leg down in prices is coming for theU.S. stock market. That's bullish for hard assets such as gold and silver.
Thereare still geopolitical issues looming over the world marketplace, including theU.S.-China trade war, U.S.-Saudi Arabia tensions over the murdered Saudijournalist, and Italy's recalcitrance over forming its budget to meet EuropeanUnion constricts. The EU Wednesday rejected the latest Italian draft budget.
Allof the above have pushed world stock markets and crude oil prices sharplylower, as well as rallied safe-haven assets like gold, U.S. Treasuries and theU.S. dollar.
Inovernight news, the Euro zone got some dour economic data when the compositeMarkit purchasing managers index (PMI) fell to 52.7 in October from 54.1 inSeptember. The October number was lower than expected and the lowest level intwo years.
Tradersand investors in Europe are awaiting Thursday's European Central Bank regularmonetary policy meeting. No change in EU monetary policy is expected, but ECBchief Mario Draghi's press conference could provide clues on future moves bythe central bank. Also, Draghi could comment on the rift between Italy's newgovernment and the EU.
TheU.S. economic highlight this week will be the first estimate of third-quarterGDP due out Friday morning. GDP is seen up 3.4% in the third quarter, on anannual basis.
Thekey outside markets today find the U.S. dollar index higher and hitting anine-week high overnight. Meantime, November Nymex crude oil prices are weakerand trading just above $66.00 a barrel. Oil prices fell to a two-month low onTuesday.
U.S.economic data due for release Wednesday includes the weekly MBA mortgageapplications survey, the monthly house price index, the flash services PMI, theflash manufacturing PMI, new residential sales, the weekly DOE liquid energystocks report and the Federal Reserve's beige book.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.2924175530478188)
Technically,gold bulls have the near-term technical advantage and gained more power Tuesdayas prices saw a bullish upside “breakout” from the recent sideways tradingrange. Bulls' next upside price objective is to produce a close in Decemberfutures above solid resistance at $1,275.00. Bears' next near-term downsideprice breakout objective is pushing prices below solid technical support at $1,220.00.First resistance is seen at the overnight high of $1,236.50 and then at thisweek's high of $1,243.00. First support is seen at $1,225.00 and then at $1,220.00.Wyckoff's Market Rating: 6.0
![Live 24 hours silver chart [ Kitco Inc. ]](http://www.kitco.com/images/live/silver.gif)
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 WyckoffFor Kitco News
Follow @jimwyckoff
jwyckoff@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.