Gold Backs Off A Bit; Keep Your Seatbelts Buckled

(Kitco News) - Gold prices aretrading modestly down in early U.S. trading Friday, on a normal correctivepullback after scoring on Thursday the strongest daily gains in over two years.Now, the yellow metal is in a much better technical posture to suggest higherprices are likely in the coming weeks, or longer. December gold futures werelast down $2.10 an ounce at $1,225.70. December Comex silver was last up $0.069at $14.675 an ounce.

Globalstock markets were mostly firmer overnight on corrective bounces from thisweek’s strong selling pressure. U.S. stock indexes are pointed toward solidlyhigher openings when the New York day session begins. However, keep yourseatbelts buckled today because volatility is likely to remain high on thislast trading day of the week, heading into an uncertain weekend not knowingwhat to expect come Monday morning. Such is also likely to limit the downsidein gold today.

Priceaction this week from a technical perspective strongly suggests the U.S. stockindexes have put in near-term tops, if not major tops. If so, such is a bullishdevelopment for the competing hard assets like the metals.

NewsU.S. President Trump and Chinese leader Xi Jinping will sit down and talk inNovember at the G20 meeting in Argentina could be helping to assuage marketconcerns today. For months the two largest economies have been on a downhillslide in relations. The Chinese yuan rebounded against the U.S. dollar today,in part on that news.

Anotherworrisome factor in the marketplace this week is notions the strong U.S.economic expansion could be coming to an end, due in part to a Federal Reservemonetary policy that got too aggressive in raising interest rates. PresidentTrump again admonished the Fed this week for raising rates too fast. He calledthe Fed “crazy” and “loco.”

Thekey outside markets today find the U.S. dollar index modestly up. Meantime, NovemberNymex crude oil prices are firmer on a corrective bounce from strong sellingpressure the past two days that begins to suggest that market has topped out.Take a look at a daily chart for unleaded gasoline futures and it certainlysuggests lower gasoline prices at the retail pumps the rest of this year, andmaybe beyond.

U.S.economic data due for release Friday includes the import and export pricesreport, and the University of Michigan consumer sentiment survey.

Technically,gold price action Thursday produced a big and bullish upside “breakout” fromthe sideways trading range seen on the daily bar chart dating back tomid-August. This suggests a market bottom is in place and that prices can trendsideways to higher for at least the near term. Gold bulls' next upsidenear-term price breakout objective is to produce a close in December futuresabove solid resistance at $1,250.00. Bears' next near-term downside pricebreakout objective is pushing prices below solid technical support at $1,200.00.First resistance is seen at this week’s high of $1,230.00 and then at $1,235.00.First support is seen at today’s low of $1,219.30 and then at $1,212.00.Wyckoff's Market Rating: 5.0

Decembersilver futures bears have the overall near-term technical advantage. Silverbulls' next upside price breakout objective is closing prices above solidtechnical 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 this week’s high of $14.70 and thenat the October high of $14.95. Next support is seen at $14.50 and then at thisweek’s low of $14.255. Wyckoff's Market Rating: 3.0.

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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