Monday October 21, 2013 8:30 AM
(Kitco News) - Gold prices are trading not far from the unchanged level in early U.S. dealings Monday. Bulls are encouraged late last week's gains are being held as the new trading week gets under way. December Comex gold was last down $0.30 at $1,314.30 an ounce. Spot gold was last quoted down $1.40 at $1316.50. December Comex silver last traded up $0.232 at $22.145 an ounce.
The flow of backed-up U.S. government economic data starts Monday. The big economic report early this week will be the U.S. employment report for September, which is due out Tuesday morning. The key non-farm payrolls number of the jobs report is expected to come in at up 180,000, while the overall unemployment rate is expected to be unchanged at 7.3%.
It's likely some of the postponed U.S. economic data that was due out during the two weeks the U.S. government was shut down will be cancelled. The fresh batch of U.S. economic data could make for more volatile price action in many markets that had seen a dearth of fresh U.S. economic/fundamental news for over two weeks.
The U.S. dollar index is near steady Monday and hovering just above last week's 10.5-month low. The market place has realized the U.S. budget/debt deal reached last week is just temporary, with the same situation potentially arising in the first quarter of next year. Also greenback-bearish is the dysfunction of U.S. lawmakers in October, which likely caused the U.S. Federal Reserve to delay any plans it had to start to wind down its quantitative easing of monetary policy. This week's bunch of U.S. economic data is likely to have a significant impact on the U.S. dollar index, which is an important daily "outside market" that can impact many other markets. The weaker U.S. dollar has been an underlying bullish factor for most raw commodity markets the past couple weeks, including the precious metals.
Asian stock markets were supported Monday on positive comments coming from Chinese government officials, who said Sunday that Chinese government economic targets will be met, due to recent better China economic data.
U.S. economic data due for release Monday includes the Chicago national activity index, existing home sales, and the weekly DOE energy stocks report.
The London A.M. gold fix is $1,316.00 versus the previous P.M. fixing of $1,316.50.
Technically, December gold futures bears still have the overall near-term technical advantage. However, Friday's bullish weekly high close suggests a near-term market bottom is in place. The gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the October high of $1,337.80. Bears' next near-term downside breakout price objective is closing prices below solid technical support at the October low of $1,251.00. First resistance is seen at last week's high of $1,328.90 and then at $1,337.80. First support is seen at $1,310.00 and then at $1,300.00.
December silver futures bears still have the overall near-term technical advantage but the bulls have gained momentum. Prices are in a two-month-old downtrend on the daily bar chart, but just barely now. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the October high of $22.525 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the October of $20.495. First resistance is seen at the overnight high of $22.285 and then at $22.525. Next support is seen at the overnight low of $21.855 and then at $21.50.
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By Jim Wyckoff, contributing to Kitco News; firstname.lastname@example.org