Gold and Silver Price Rises Amid USDX Decline and Bullish China Rumors

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(Kitco News) – Gold and silver prices are significantly higher at the start of the US session on Tuesday, with silver hitting a three-week high. The decline in the US Dollar Index and falling US Treasury yields on the day are supporting precious metals markets. Some potentially positive news from China is also working in favor of bulls in the metals market. December gold was last up $15.70 at $1,656.30 and December silver was up $0.816 at $19.925.

Global equity and commodity markets were supported by upbeat reports from China. Chinese stock markets rallied on Tuesday on rumors that the Chinese government has a plan to phase out its “zero covid” policies by March. Share prices in China fell from their highs following reports that Foreign Minister Zhao Lijian said he was unaware of the matter. China is the world’s second-largest economy and if it picks up, demand for commodities, including gold and silver, would be significantly bullish.

Global equity markets were mostly firmer overnight. US stock indices are heading for higher openings when the day’s session in New York begins. Equity traders are through with the historically difficult months of September and October, having had a very strong October, with short-term upward price trends in place on the daily index charts.

In other overnight news, Australia’s central bank raised one of its key interest rates by 0.25%.

The World Gold Council reportedly saw substantial, unreported purchases of the gold as central bank bullion purchases hit a record high in the third quarter. Reports indicate that 400 metric tons of gold were bought by central banks in the last quarter, pushing purchases to their highest level since 1967. arms,” brokerage SP Angel said in an email sent Tuesday morning. The WGC reports that Turkey and Qatar have both increased their purchases, with China and Russia also expected to participate, although their purchases are not reported, the broker said.

Traders are eagerly awaiting the Federal Reserve’s Open Market Committee (FOMC) meeting which begins Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chairman Jerome Powell. Most expect the FOMC to raise the federal funds rate another 0.75%. Traders and investors also want to see comments from the FOMC and Powell regarding the future trajectory of US monetary policy, especially when the Fed rolls back the accelerator to aggressively raise interest rates.

Major outside markets are seeing the US Dollar Index significantly lower today. Nymex crude oil prices are higher and are trading around $88.00 per barrel. The 10-year US Treasury yields 3.953%.

US economic data due out on Tuesday includes Johnson Redbook weekly reports and chain store retail reports, US manufacturing purchasing managers’ index (PMI), ISM manufacturing report of businesses, construction expenditures and sales of the domestic auto industry.

Technically, bearish gold futures still have the strong overall short-term technical advantage. The Bulls’ next upside price objective is to produce a close above the strong resistance at $1,700.00. Bears next short-term downside price objective is to push futures prices below strong technical support at $1,600.00. First resistance is seen at $1,670.90 and then at last week’s high at $1,679.40. First support is seen at the overnight low of $1,633.60 and then at the October low of $1,621.10. Wyckoff Market Rating: 2.5

The silver bulls have acquired the overall short-term technical advantage. Prices are in an uptrend on the daily bar chart. The next upside price objective for silver bulls is to close prices above strong technical resistance at the October high of $21.31. The next downside price objective for the bears is to close prices below the strong support at $18.00. The first resistance is seen at $20.50 and then at $20.70. Next support is seen at $19.50 and then at today’s low of $19.085. Wyckoff Market Rating: 5.5.