Gold, Silver Prices Hit By Stronger U.S. Dollar

(Kitco News)- Gold and silver prices are lower in early-afternoon U.S. trading Tuesday, but upfrom daily lows that saw silver hit a 2.5-year low. A stronger U.S. dollar onthe foreign exchange market today trumped ongoing world trade tensions andshaky secondary currency markets. December gold futures were last down $7.40 anounce at $1,199.30. December Comex silver was last down $0.387 at $14.17 anounce.

Worldstock markets were mostly lower today, amid ongoing world trade worries afterPresident Trump during the weekend threatened to exclude Canada from thejust-concluded U.S.-Mexico trade deal. Presently, the specter of reduced demandfor precious metals due to inhibited world economic growth from the trade spatsis outweighing any safe-haven demand for the metals from the trade situation.

Thecalendar has turned to September and investors are likely in a more seriousmood, after a summertime of fun and family vacations. The months of Septemberand October many times find the marketplace focusing on matters of worry. Thenext couple of months could well find the marketplace closely examining thesecondary currency markets and the beating they have taken against the U.S.dollar this year. If the secondary currency markets continue to depreciateagainst the dollar, such could create some safe-haven demand for gold andsilver due to fears of a currency market contagion.

Thekey outside markets today find the U.S. dollar index higher as the greenbackcontinues its assault on the world's secondary currencies. Meantime, Nymexcrude oil prices are slightly up but well off overnight highs that saw priceshit a 3.5-month high, on worries about a hurricane in the Gulf of Mexicoshutting in some U.S. crude oil production for a period of time.

Technically,gold bears have the solid overall near-term technical advantage. Gold bulls'next upside near-term price breakout objective is to produce a close inDecember futures above solid resistance at last week's high of $1,220.70.Bears' next near-term downside price breakout objective is pushing prices belowsolid technical support at the August low of $1,167.10. First resistance isseen at today's high of $1,209.70 and then at Friday's high of $1,214.90. Firstsupport is seen at today's low of $1,195.10 and then at $1,189.50. Wyckoff'sMarket Rating: 2.0.

Decembersilver futures bears have the solid overall near-term technical advantage andgained more power today. Silver bulls' next upside price breakout objective isclosing prices above solid technical resistance at last week's high of $15.07an ounce. The next downside price breakout objective for the bears is closingprices below solid support at $14.00. First resistance is seen at $14.405 andthen at today's high of $14.59. Next support is seen at today's low of $14.035and then at $14.00. Wyckoff's Market Rating: 1.0.

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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