A strong dollar and rising bond yields continue to punish gold and silver

While gold and silver bears are currently in control, both markets are technically oversold and good price corrections are expected very soon.

Risk attitudes have become more optimistic to start the trading week and this is also a negative for the safe haven gold and silver markets. In a last-minute attempt to prevent a US government shutdown, President Biden over the weekend signed legislation as a stopgap measure to fund the federal government for another 47 days, through November 17. Most markets expected that the government would shut down over the weekend. However, the Senate, after strong pressure from House Democrats, approved the measure in a lopsided vote. This decision, taken at the 11th hour, ensures the continuation of various government services and the payment of salaries to federal employees, at least temporarily. However, lawmakers still need to finalize the plan to adopt a permanent budget to meet the country’s financial needs.

Asian and European stocks were mixed overnight, with most Asian stocks lower and most European stocks rising. US stock indices are mixed at midday.

China got some slightly upbeat economic data over the weekend, as its September factors reported their first expansion in activity since the spring. China’s manufacturing PMI registered 50.2 in September from 49.7 in August. A reading above 50.0 indicates expansion. Metal markets more or less shrugged off the friendly news, suggesting that demand for metals from the world’s second-largest economy may start to pick up.

Technically, December gold futures prices reached a 10-month low today. Bears have a generally strong technical advantage in the near term. There is a downtrend that has been going on for five months on the daily bar chart. However, the market is now in the oversold zone in the short term and is expected to see a good corrective bounce soon. The next upside price objective for bulls is to achieve a close above the strong resistance at $1900.00. The next near-term downside price objective for bears is to push futures prices below strong technical support at $1,800.00. The first resistance appears at today’s high at $1,864.70 and then at $1,875.00. The first support is located at today’s low at $1,942.70 and then at $1,835.00. Wyckoff Market Rating: 1.0.

December silver futures prices hit a 6.5-month low today. Silver bears have a consistent overall technical advantage in the near term. Prices broke strongly below strong technical support levels below the market. There is now an ongoing nine-week downtrend on the daily bar chart. The next upside price target for silver bulls is a price close above the strong technical resistance at $23.00. The next downside price target for the bears is closing prices below the strong support at the March low at $20.615. The first resistance is at $22.00 and then at today’s high of $22.41. The next support is at today’s low at $21.405 and then at $21.00. Wyckoff Market Rating: 2.5.