Gold, silver gain on more downbeat U.S. economic data

(Kitco News) – Gold prices are higher in midday U.S. trading Wednesday and notched a three-week high, in the aftermath of another batch of U.S. economic data than came in a bit weaker than market expectations. Silver is trading near unchanged but hit a four-week high early on today. December gold was last up $9.30 at $1,974.50 and December silver was up $0.046 at $25.18.

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This morning’s ADP National Employment Report for August showed a rise of 177,000 jobs, compared to expectations for a gain of 200,000 and compares with a revised rise of 371,000 in the July report. Meantime, the second estimate of second-quarter U.S. GDP showed a gain of 2.1%, year-on-year, versus the first estimate of up 2.4% and was below market expectations. The closely watched PCE price index for the second quarter was up 2.5% versus the first estimate of up 2.6%. All of these numbers fall into the camp of the U.S. monetary policy doves, who want the Federal Reserve to hold off on raising interest rates further.

The busy U.S. data week is highlighted by Friday’s employment situation report for August from the Labor Department. The key non-farm payrolls number is expected to come in at up 170,000, compared to a rise of 187,000 in the July report.

Asian and European stock markets were mostly higher in overnight trading. U.S. stock indexes are slightly higher at midday. Trader and investor sentiment overseas has improved this week as China continues to implement measures to stimulate its listing economy. Reports say China’s largest banks are preparing to cut interest rates on existing mortgages to support consumer spending and the property sector.

The key outside markets today see the U.S. dollar index solidly lower. Nymex crude oil futures prices are firmer and trading around $81.50 a barrel. The benchmark U.S. Treasury 10-year note is presently fetching 4.114%.

Technically, December gold futures prices hit a three-week high today. More short covering and bargain hunting were featured. Bears still have the overall near-term technical advantage but bulls have gained some momentum. Prices are starting to trend up. Bulls’ next upside price objective is to produce a close above solid resistance at $2,000.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the August low of $1,913.60. First resistance is seen at $1,985.00 and then at $2,000.00. First support is seen at today’s low of $1,962.80 and then at $1,950.00. Wyckoff’s Market Rating: 4.0

December silver futures hit another four-week high today. The silver bulls have the overall near-term technical advantage. Prices are trending higher on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the July high of $25.82. The next downside price objective for the bears is closing prices below solid support at $23.50. First resistance is seen at today’s high of $25.425 and then at $25.82. Next support is seen at today’s low of $24.92 and then at $24.555. Wyckoff’s Market Rating: 6.5.

December N.Y. copper closed up 35 points at 384.25 cents today. Prices closed nearer the session high and hit a three-week high. The copper bears have the slight overall near-term technical advantage. However, prices are starting to trend up. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at the August high of 403.75 cents. The next downside price objective for the bears is closing prices below solid technical support at the August low of 367.00 cents. First resistance is seen at today’s high of 385.05 cents and then at 388.00 cents. First support is seen at this week’s low of 378.00 cents and then at 375.00 cents. Wyckoff’s Market Rating: 4.5.