A lot of drama on the world theatre of economic and social happenings! China, in order to ensure economic growth and amid fears of slowing growth, is set to invest 1.7 trillion U.S. dollars in a stimulus program over the next 5 years. Europe is continuously experiencing more and more deficit problems among the different members of the Euro-Zone and Egypt's interim government offered to resign. The move called into question the ligitimacy of the country's military rulers, who for months have faced increasing demands that they step aside for a new democracy.
The U.S. Economy grew more slowly (2% annually) over the summer (2nd. quarter) than the government had earlier estimated (2.5% annually), because of businesses cut back more sharply on restocking of shelves. The Commerce Department said Tuesday that the after-tax incomes fell by the largest amount in two years, reflecting high unemployment and lower pay raises.
Comex December gold futures prices are trading higher in early U.S. trading Tuesday morning. Precious metals are seeing a corrective upside bounce from the strong selling pressure seen on Monday that did produce fresh near-term technical damage for both gold and silver. A weaker U.S. dollar index, higher crude oil and other commodity market prices are bullish “outside market” forces for the metals Tuesday morning. December gold last traded up $15.30 at $1,693.90 an ounce. Spot gold last traded up $15.80 an ounce at $1,693.50. December Comex silver last traded up $0.664 at $31.78 an ounce.
The so-called super committee of U.S. congress members failed to agree on U.S. spending cuts, which was confirmed by congressional leaders Monday. Meantime, the EU debt crisis has stabilized just a wee bit Tuesday following a somewhat well-subscribed Italian bond auction. The market place was also relieved after key ratings agencies said they would not immediately downgrade the U.S. credit rating after the super committee failed to reach agreement on spending cuts. There are key EU economic reports out later this week, and with the U.S. Thanksgiving holiday on Thursday, many U.S. traders and investors are a bit worried that with U.S. markets closed on Thursday, the world market place may be able to get the jump on the U.S., regarding any fresh, major EU developments that could occur on Thursday.
The U.S. dollar index is seeing a corrective pullback on Tuesday after hitting a six-week high on Monday. The dollar index bulls still have some upside near-term technical momentum and that is still a bearish underlying factor for the precious metals markets. Crude oil prices are trading higher Tuesday morning but have backed well down from last week’s high as the crude bulls have faded to suggest a top is in place for that market.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs chain store sales index, the second-quarter GDP estimate, the weekly Johnson Redbook retail sales report and the Richmond Fed business activity survey.
The London A.M. gold fixing was $1,697.50 versus the previous P.M. fixing of $1,702.00.
Technically, December gold futures prices on Monday closed near the session low and were hammered to a fresh four-week low. Near-term technical damage has been inflicted recently, including more Monday. Bears have the slight near-term technical advantage. Bulls' next upside technical objective is to produce a close above technical resistance at Monday’s high of $1,727.40. Bears' next near-term downside price objective is closing prices below solid technical support at $1,604.70. First resistance is seen at the overnight high of $1,700.60 and then at 1,727.40. First support is seen at Monday’s low of $1,667.10 and then at $1,650.00.
December silver futures prices Monday and hit a fresh four-week low. Near-term technical damage has been inflicted in silver recently. Bulls next upside price breakout objective is closing prices above solid technical resistance at $34.00 an ounce. The next downside price breakout objective for the bears is closing prices below major psychological support at $30.00. First resistance is seen at the overnight high of $32.005 and then at Monday’s high of $32.415. Next support is seen at the overnight low of $31.16 and then at Monday’s low of $30.65.
As economies around the world are finding themselves pushed into realism - politicians can only calm their constituents for so long with only words and no deeds - we will see the overall commodity markets increase in their valuation due to the, possibly, immediate onset of a depression (one morning we'll wake up with "the news") and the thereto related hyper-inflation and enormously high, slowly growing, unemployment (potentially into the 20-30%). The real insight is not being provided to the general public and as such, once economies start imploding rapidly around the world, a panic will arise among the people. The same people that are being lied to daily to apeace them (for now!). Why is it so hard to inform the same people honestly so we can jointly work on resolving the problems at hand. It always appears that side-stepping is easier for the short-term with some incredibly large future issues, than considering going straight forward for the long-term with some smaller side issues.
Sources: Kitco, Apmex, open internet sources, Yahoo, internal sources.
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