(Kitco News) - Gold andsilver prices are moderately higher in early U.S. trading Tuesday, boosted by asharp drop in the U.S. dollar index today. December gold futures were last up $7.10an ounce at $1,233.40. December Comex silver was last up $0.175 at $14.675 anounce.
Tuesday’sU.S. mid-term elections turned out as many had expected and saw the Republicansmaintain control of the Senate but the Democrats gained control of the House ofRepresentatives. The world marketplace appears comfortable with a split U.S.Congress and likely gridlock on major new legislation over the next two years.
Manybelieved the U.S. elections were a referendum on the performance of PresidentTrump. Many would argue the U.S. elections did not turn out too bad for Trump,noting that history shows the party not in control typically fares better inmid-term elections.
TheU.S. dollar is taking a solid downside hit following the elections. There are nownotions any new Trump fiscal policy proposals that would be pro-growth andpro-business will get mired down in Congress and die.
Globalstock markets were mixed to firmer overnight, with European shares mostly upand Asian shares narrowly mixed. U.S. stock indexes are pointed toward solidlyhigher openings when the New York day session begins.
Withthe U.S. elections out of the way, focus will turn to the Federal Reserve’sOpen Market Committee (FOMC) that meets for a two-day session to discuss U.S.monetary policy, with a statement due Thursday afternoon. No change in interestrates is expected at this meeting. As always, traders will scrutinize wordingof the FOMC statement and Chairman Jay Powell’s remarks at his pressconference, for clues on the future direction and timing of U.S. monetarypolicy.
Theother key “outside market” today finds Nymex crude oil prices higher andtrading around $62.75 a barrel.
U.S.economic data due for release Wednesday includes the weekly MBA mortgageapplications survey, the weekly DOE liquid energy stocks report and consumerinstallment credit.
Technically,gold bulls and bears are on a level overall near-term technical playing field.Bulls’ next upside price objective is to produce a close in December futuresabove solid resistance at the October high of $1,246.00. Bears' next near-termdownside price breakout objective is pushing prices below solid technicalsupport at $1,200.00. First resistance is seen at last week’s high of $1,239.30and then at $1,246.00. First support is seen at the overnight low of $1,224.20and then at $1,220.00. Wyckoff's Market Rating: 5.0
Decembersilver futures bears have the overall near-term technical advantage. However,recent price action suggests a market bottom is in place. Silver bulls' nextupside price breakout objective is closing prices above solid technicalresistance at $15.00 an ounce. The next downside price breakout objective forthe bears is closing prices below solid support at the September low of $13.965.First resistance is seen at $14.95 and then at $15.00. Next support is seen atthe overnight low of $14.475 and then at last week’s low of $14.24. Wyckoff'sMarket Rating: 3.0.
By Jim WyckoffFor Kitco News
Follow @jimwyckoff