Gold, silver down amid weak China economic news, bearish overseas markets

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(Kitco News) – Gold and silver prices are solidly lower in midday US trading on Monday, on concerns about demand for the metals after a batch of weak economic data from China. Sharply lower crude oil prices and a stronger US dollar index to start the trading week are also bearish daily forces working against the metals. October gold futures were last down $19.60 at $1,785.70. September Comex silver futures were down $0.443 at $20.26 an ounce.

China’s central bank unexpectedly announced this week that it will cut interest rates and add liquidity to China’s financial system after some tough economic data from the world’s second-largest economy. Chinese data on factory output, investment, consumer spending and real estate weakened in July. The harsh news from China added to fears of a global economic recession. Covid restrictions and a troubled housing market have helped slow China’s economy in recent months. Other commodity prices on Monday were also impacted by news from China, led by a sharp drop in crude oil prices. China is a major global consumer of raw materials, including metals. A weakening Chinese economy suggests lower demand for raw materials.

Global stock markets were mixed overnight. US stock indexes are slightly higher at midday.

Today’s key external markets see Nymex crude oil prices fall sharply and trade around $88.50 a barrel. The US dollar index is solidly higher at midday in the US. The yield on the 10-year US Treasury note stands at 2.781%.

Technically, October gold futures bears have the overall short-term technical advantage. Now there is barely an incipient price trend on the daily bar chart. The next upside price objective for the bulls is to produce a close above solid resistance at the August high of $1,814.40. The next short-term downside price objective for bones is to push futures prices below strong technical support at $1,725.00. First resistance is seen at $1,800.00 and then at today’s high of $1,808.20. First support is seen at today’s low of $1,777.60 and then at $1,760.00. Wyckoff Market Rating: 3.5.

Bears in September silver futures have the overall short-term technical advantage. An incipient uptrend on the daily bar chart has stalled. The next bullish price target for silver bulls is closing prices above solid technical resistance at $22.00. The next downside price objective for the bears is to close prices below the solid support at $19.00. First resistance is seen at $20.50 and then at today’s high of $20.87. The next support is seen at $20.00 and then $19.47. Wyckoff Market Rating: 3.5.

New York September copper closed up 525 points at 361.60 cents today. Prices close to the mid-range. Major “outside markets” were bearish for copper today as crude oil prices fell sharply and the US dollar index rose. Copper bulls and bears are at a general level of short-term technical play. Prices are trending upwards on the daily bar chart. The next bullish price target for copper bulls is to push and close prices above solid technical resistance at 385.00 cents. The next downside price objective for the bears is a price close below the solid technical support at 330.00 cents. The first resistance is seen at last week’s high of 371.30 cents and then at 380.00 cents. First support is seen at today’s low of 354.60 cents and then at 350.00 cents. Wyckoff Market Rating: 5.0.

Disclaimer: The opinions 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 the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee this accuracy. This article is for informational purposes only. It is not a request to make any exchange of goods, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no liability for loss and/or damage arising from the use of this publication.

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