Gold, Silver Prices Rebound As U.S. Dollar Index Backs Off

Editor's Note: The article was updated to reflect a change in prices.

(Kitco News)- Gold and silver prices are modestly up and near their daily highs in early U.S.trading Wednesday. A sell off in the U.S. dollar index today is working infavor of the precious metals market bulls. December gold futures were last up $3.40an ounce at $1,202.60. DecemberComex silver was last up $0.045 at $14.22 anounce.

Worldstock markets were mostly lower overnight. U.S. stock indexes are also pointedtoward lower openings when the New York day session begins. Global tradeworries and the potential drag on the major economies of the world are weighingon equities this week. The U.S. and Canada are deadlocked on tradenegotiations, while there are concerns the U.S. will slap more trade sanctionson China. Asian stock markets were also pressured today by weak economic datacoming out of China.

Secondarycurrency markets, including the Argentine peso and Turkish lira, remain underpressure against the U.S. dollar. There are still worries this matter couldturn into something more serious that impacts the global financial system.

Inovernight news, the Euro zone composite purchasing managers index (PMI) came inat 54.4 in August versus 54.2 in July. The August reading was right in linewith market expectations. A number above 50.0 suggests growth in the sector.

Thekey outside markets today find the U.S. dollar index lower after holding slightovernight gains. Meantime, Nymex crude oil prices are lower on a correctivepullback after hitting a 3.5-month high on Tuesday. Also, the storm in the Gulfof Mexico did not reach hurricane status, as some initially reckoned it would.

U.S.economic data due for release Wednesday includes the weekly MBA mortgageapplications survey, the weekly Johnson Redbook and Goldman Sachs retail salesreports, the international trade in goods and services report, and the ISM NewYork report on business.

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 in Decemberfutures above solid resistance at last week's high of $1,220.70. Bears' nextnear-term downside price breakout objective is pushing prices below solidtechnical support at the August low of $1,167.10. First resistance is seen at Tuesday'shigh of $1,209.70 and then at $1,215.00. First support is seen at Tuesday's lowof $1,195.10 and then at $1,189.50. Wyckoff's Market Rating: 2.0

December silver futures bears have the solid overallnear-term technical advantage. Silver bulls' next upside price breakoutobjective is closing prices above solid technical resistance at $15.00 anounce. 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 Tuesday's high of $14.59. Next support is seen at Tuesday'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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