Gold, Silver Prices Up Amid Wobbly U.S. Stock Market

(Kitco News)- Gold and silver prices are modestly higher in early-afternoon U.S. trading Thursday.Some worries about the health of the U.S. stock market, following the recentsell-offs and increased volatility, are supporting the safe-haven metals. Theprecious metals bulls are impressed their markets are able to post modest gainstoday in the face of a stronger U.S. dollar index. December gold futures werelast up $2.70 an ounce at $1,212.80. December Comex silver was last up $0.125at $14.205 an ounce.

Abatch of U.S. economic data today was a mixed bag for the marketplace, with themetals prices seeing no significant reaction after their morning releases.

U.K.Prime Minister Theresa May had two of her cabinet members resign Thursday,including her Brexit secretary, following May's pronouncement Wednesday thatshe is sticking with her controversial Brexit plan. The British pound sunk onthe news of the resignations, while European bond yields rose. There is nowtalk May could see Parliament move to a no confidence vote. Gold may be seeingsome limited safe-haven buying interest from this matter. However, thesituation is not a serious geopolitical factor for the world marketplace.

TheU.S. dollar index is trading higher today and not far below this week's1.5-year high. The strong U.S. economy compared to most other world economies,and the interest rate differentials in those economies that see U.S. ratessignificantly higher, are bullish underlying elements that are likely tocontinue to provide strong support for the greenback.

Themarketplace took note of U.S. Federal Reserve Chairman Jerome Powell's commentsat a speech late Wednesday that the Fed is closely monitoring the modestdeceleration in world economic growth. However, Powell implied that situationis not now altering the Fed's monetary policy tenor of continuing to slowlyraise U.S. interest rates. Powell added that a further U.S. stock market selloff could impact the Fed's policy decisions.

Tradersand investors are also keeping a close eye out for new developments on theU.S.-China trade war front. Reports this week say there has been movement onChina's part to better communicate with the U.S. regarding getting formaldiscussions under way. Most believe the G20 meetings in Argentina later thismonth will see U.S. President Trump and Chinese Premiere Xi meet face-to-faceon the matter. A U.S.-China trade agreement would likely see the metals marketsreact in bullish fashion, as China is a major metals importer.

Thebig drop in crude oil prices the past six weeks has the world marketplace veryuneasy. Nymex crude oil futures prices are firmer today on short covering andtrading just below $57.00, after dropping to an 11-month low of $54.75 a barrelon Tuesday. In less than six weeks' time Nymex crude prices have dropped byover $20 a barrel. The steep slide in oil prices is a bearish element for mostof the raw commodity sector, including the precious metals, as oil is arguablythe leader of that sector.

Technically,the gold bears still have the overall near-term technical advantage. Goldbulls' next upside near-term price breakout objective is to produce a close inDecember futures above solid technical resistance at $1,230.00. Bears' nextnear-term downside price breakout objective is pushing prices below solidtechnical support at the September low of $1,184.30. First resistance is seenat this week's high of $1,217.20 and then at $1,220.00. First support is seenat today's low of $1,207.10 and then at $1,200.00. Wyckoff's Market Rating: 3.0.