Gold, silver rally amid wobbly world stock markets

(Kitco News) – Gold and silver prices are solidly higher in midday U.S. trading Wednesday on safe-haven demand as risk aversion has up-ticked markedly at mid-week. World stock markets are in sell-off mode on concerns regarding slowing global economic and trade growth. December gold futures were last up $17.90 an ounce at 1,506.90. December Comex silver prices were last up $0.388 at $17.695 an ounce.
Dour manufacturing reports from the U.S. and Europe on Tuesday spooked traders and investors. Manufacturing activity in the U.S. slowed to a 10-year low in September, according to the Institute of Supply Management. The U.S.-China trade war is mostly to blame for the slowdown in global economic and trade growth, many agree. The rhetoric between both sides has been and continues to be upbeat one day and downbeat leaving traders and investors perplexed.

Asian and European stocks were also mostly lower overnight. Remember that the month of October can be very unkind to stock market traders.

Violence in Hong Kong has escalated this week, with the national holiday in China. A protester was shot by police and is in critical condition, reports said. This is also adding some anxiety to the marketplace.
Traders are still monitoring world government bond markets following a surprisingly very poor pubic acceptance of the latest bond offering from the Japanese government. However, at mid-week U.S. Treasury bonds have recovered amid ideas of an easier monetary policy coming from the Federal Reserve, following the weak manufacturing data reported on Tuesday, and on safe-haven demand.
U.S. ADP national employment report for September came in at up 135,000. The ADP jobs growth number was forecast to be up 125,000. The ADP report is a precursor tos more important employment situation report for September from the U.S. Labor Department. Fridayâ??s key non-farm payrolls number is forecast to be up 145,000 in September.
The U.S. dollar index is near steady in midday U.S. trading. The USDX hit a contract and two-year high on Tuesday. Look for the greenback to continue to appreciate for at least the near term. Meantime, Nymex crude oil prices are lower and trading around $52.60 a barrel. Oil prices are in a steep slide from the September spike.

Technically, the gold bulls have the overall near-term technical advantage and have regained some footing at mid-week. However, a four-week-old downtrend is still in place on the daily bar chart. Bulls next upside price objective is to produce a close in December futures above solid resistance at $1,525.00. Bears’ next near-term downside price breakout objective is pushing December futures prices below solid technical support at this low of $1,465.00. First resistance is seen at $1,515.00 and then at $1,520.00. First support is seen at $1,500.00 and then at $1,490.00. Wyckoff’s Market Rating: 6.0.

December silver futures bulls and bears are back on a level overall near-term technical playing field. A four-week-old downtrend is still in place on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $18.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at this low of $16.94. First resistance is seen at $17.75 and then at $18.00. Next support is seen at low of $17.24 and then at $17.00. Wyckoff’s Market Rating: 5.0.
By Jim Wyckoff
For Kitco News