- Global stock market investors are still riding high as the Dow Jones is trending upwards based on a Wall Street Journal report that the Fed’s gradual tapering will begin in November and that President Biden and China’s Xi Jinping are talking to de-escalate economic tension between the two countries.
- Even with investors continuing to go all-in on stocks, Big Banks such as Deutsche Bank AG are “urging caution” and “warned there is increased risk of an equity market correction as stock valuations have risen to around 21 times earnings.”
- As a result, gold and silver futures are trending steadily higher. However, there are still bulls and bears on each precious metal. If the coming inflation report shows worse inflation than expected, the bulls could be right, and gold futures may finally push through the elusive $1,836.20 price ceiling.
(Kitco News) - Gold and silver prices are not trading far from unchanged in early U.S. dealings Friday. Focus of the marketplace to end the trading week is on the U.S. producer price index report for August, which is seen coming in at up 0.6% from July. October gold futures were last up $0.60 at $1,798.40. December Comex silver was last up $0.013 at $24.19 an ounce.
Global stock markets were mostly firmer in overnight trading. The U.S. stock indexes are pointed to higher openings when the New York day session begins. It’s been a choppy week for the U.S. stock market. After some risk aversion exhibited earlier this week, traders and investors appear to be more upbeat to end the trading week.
In overnight news, Dow Jones Newswires reported the Federal Reserve will likely begin to gradually taper its $120 billion a month bond-buying program (quantitative easing) in November.
Reports said Deutsche Bank AG has joined other investment banks in urging caution on investors continuing to load up on U.S. stocks. The Nasdaq and S&P 500 stock indexes have recently hit record highs. The investment bank warned there is increased risk of an equity market correction as stock valuations have risen to around 21 times earnings.
The key outside markets today see the U.S. dollar index slightly weaker. Nymex crude oil futures prices are higher and trading around $69.25 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.312%.
U.S. President Biden and Chinese leader Xi Jinping had a lengthy telephone conversation Thursday in an effort to ease tensions between the world’s two largest economies. The marketplace is reading that as a positive development.
U.S. economic data due for release Friday includes the producer price index and monthly wholesale trade. There is also an important USDA supply and demand report for grains.
Technically, October gold futures bulls still have the slight overall near-term technical advantage but need to show more power soon to keep their edge. Prices are still in a four-week-old uptrend on the daily bar chart, but just barely. Bulls’ next upside price objective is to produce a close above solid resistance at the July high of $1,836.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,775.00. First resistance is seen at the overnight high of $1,803.70 and then at $1,815.00. First support is seen at the overnight low of $1,792.30 and then at this week’s low of $1,780.80. Wyckoff's Market Rating: 5.5.
The silver bulls have the slight overall near-term technical advantage. Bulls are still working on a four-week-old price uptrend on the daily chart. Silver bulls' next upside price objective is closing December futures prices above solid technical resistance at $26.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at Wednesday’s high of $24.48 and then at the September high of $24.945. Next support is seen at the overnight low of $24.00 and then at this week’s low of $23.865. Wyckoff's Market Rating: 5.0.
Originally posted on Kitco