Jim Wyckoff - Daily Gold Market Updates

Gold and silver prices are lower and hit five-week lows in early U.S. trading Monday. Recently rising U.S. Treasury yields and a stronger U.S. dollar index are squelching the precious metals markets bulls. And also looming is this week’s Federal Reserve FOMC meeting that is likely to lean hawkish on U.S. monetary policy. December gold was last down $73.00 at $4,335.40 and December silver was down $1.793 at $63.39.

Greenback rallies ahead of Fed’s FOMC meeting. The U.S. dollar index is posting strong gains today, gaining for a fourth consecutive session as traders and investors prepare for the upcoming Federal Reserve Open Market Committee (FOMC) policy meeting while assessing the impact of surging oil prices. Markets are currently pricing in an 86% probability that the Fed will raise its fed funds policy rate by 25 basis points on Wednesday, with another hike expected later this year. Data released Friday showed U.S. consumer inflation held steady at 3.4% in August, matching July’s reading and market expectations, while underlying inflation came in above forecasts as core CPI rose 0.3% month-on-month. Higher oil prices added further inflationary pressure after Saudi Arabia shut down the critical East-West pipeline, which provides an alternative route around the Strait of Hormuz. Reads a Bloomberg headline today: “Fed’s Warsh on Collision Course with Trump as Rate Hike Looms.”

“Oil Jumps as Shutdown of Saudi Pipeline Deepens Energy Crisis.” That’s a Bloomberg headline overnight. “Oil prices rose after Saudi Arabia closed a major crude pipeline following attacks, disrupting a key route that bypasses the Strait of Hormuz. The closure may lead to output cuts if it is prolonged, according to June Goh, senior oil market analyst at Sparta Commodities SA. A meeting between Iran and several Gulf nations on creating a temporary shipping lane through Hormuz was postponed, amid a rapid military advance by Iranian-backed Houthi militants in Yemen,” said the report. Brent crude oil futures rose as much as 3.7% to above $108 a barrel, before paring gains, while West Texas Intermediate was near $103. Saudi Arabia said late on Friday that it had halted the East-West pipeline as a precaution after attacks the previous day. There’s been no indication of when operations will resume.

Trump says summit meeting with Xi still on. President Trump said he is not worried that Chinese President Xi Jinping will cancel a highly anticipated visit later this month. “No, I’m not worried about that,” Trump told reporters as he attended the Irish Open in Doonbeg, Ireland on Sunday and as reported by Bloomberg. “We have a great relationship. He wants to get along, and we want it. We’re going to get along.” Trump’s comments follow a recent report that China had warned the U.S. that it would scrap Xi’s upcoming visit if the U.S. approved new arms sales to Taiwan, a major point of contention for Beijing. Trump has said he is weighing a $14 billion arms deal with Taiwan, the self-governing democratic island, that China sees as part of its country. Xi has warned Trump in the past that there is a potential for conflict if the issue of Taiwan is mismanaged.

Technically, December gold futures bulls’ next upside price objective is to produce a close above solid resistance at the August high of $4,755.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the June low of $4,015.60. First resistance is seen at $4,400.00 and then at $4,450.00. First support is seen at $4,300.00 and then at $4,250.00. Wyckoff's Market Rating: 4.0

December silver futures bulls see their next upside price objective is closing prices above solid technical resistance at the August high of 72.05. The next downside price objective for the bears is closing prices below solid support at the July low of $55.60. First resistance is seen at $65.00 and then at $68.00. Next support is seen at $62.00 and then at $60.00. Wyckoff's Market Rating: 4.0

Remembering September 11, 2001. Those of us old enough to remember know exactly where we were 25 years ago today when we heard the news of a major terror attack on U.S. soil. If you have not seen the video of the nearly 3,000 synchronized drones forming the twin towers in New York City last night, it’s a must see. May God Bless the United States of America, and especially those who lost friends and loved ones on that fateful day a quarter-century ago.

Gold and silver prices are lower in early U.S. trading Friday. Rising U.S. Treasury yields and a firmer U.S. dollar index late this week are bearish “outside-market” elements for the precious metals markets. Also, another key U.S. inflation report looms today. December gold was last down $26.60 at $4,381.00 and December silver was down $0.567 at $64.37.

U.S. consumer price index report out this morning. The annual U.S. consumer inflation rate is expected to have held steady at 3.4% in August, matching the July reading. On a monthly basis, CPI is forecast to rise 0.4%, the strongest increase in three months, following a 0.1% gain in July. Gasoline prices are expected to have climbed nearly 3%, while grocery prices are also projected to rebound. Airfares are likely to remain elevated amid higher fuel costs, while housing costs are expected to continue showing signs of softness. Meanwhile, core CPI, which excludes food and energy, is expected to rise 0.2%, month-on-month, matching July’s increase, and 2.4%, annually, which would mark the lowest reading since March of 2021, down from 2.5% in July. Overall, inflation is expected to remain well above the Fed’s 2% target. Bond bears have pushed benchmark U.S. 10-year Treasury yields toward the closely watched 5% level ahead of today’s key U.S. inflation data that stands to determine expectations for a Federal Reserve interest-rate hike next week. TradingEconomics.com

IEA cuts its forecast for global crude oil demand. The International Energy Agency lowered its forecast for oil demand and said consumption may have to decline further in the coming months as the U.S.-Iran war drags on. The Paris-based agency deepened its estimates for this year’s decline in global oil demand by 940,000 barrels a day, to 2.5 million barrels a day. The return of a supply surplus will now be delayed until 2027, the IEA said. This year’s expected decline in global oil demand is the biggest loss in annual average terms since the 2020 Covid pandemic. The agency said the market is heading for a deeper supply shortfall than previously estimated because the war is having an even bigger impact on the flow of oil than on consumption.

The key outside markets today see the U.S. dollar index modestly higher. October Nymex WTI crude oil prices are solidly lower after hitting a three-month high overnight and are trading around $99.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.944%.

Technically, December gold futures bulls’ next upside price objective is to produce a close above solid resistance at the August high of $4,755.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the June low of $4,015.60. First resistance is seen at this week’s high of $4,488.80 and then at $4,500.00. First support is seen at the overnight low of $4,341.40 and then at last week’s low of $4,329.20. Wyckoff's Market Rating: 4.5

December silver futures bulls see their next upside price objective is closing prices above solid technical resistance at this August high of 72.05. The next downside price objective for the bears is closing prices below solid support at $60.00. First resistance is seen at $67.00 and then at this week’s high of $68.98. Next support is seen at the overnight low of $63.51 and then at $62.00. Wyckoff's Market Rating: 4.0

Gold and silver prices are lower in early U.S. trading Thursday. An up-tick in U.S. Treasury yields and a firmer U.S. dollar index on this day are bearish “outside-market” elements for the precious metals markets. Traders are awaiting a key U.S. inflation report that is out shortly, as of this writing. December gold was last down $37.80 at $4,422.10 and December silver was down $2.351 at $66.305.

Bessent bond move backfires. The Treasury Department on Wednesday announced it would buy back $6 billion worth of 10- to 20-year government bonds, aiming to boost prices and drive down yields. Instead, Treasury yields jumped sharply after the announcement, with the 10-year rate trading as high as 4.85%, the highest since November 2023, while the 30-year bond yield rose as high as 5.3%. Yields rise as Treasury prices fall. Treasury last month had said it would at least double buybacks of longer-term bonds from a maximum of $2 billion per operation. Treasury Secretary Scott Bessent and officials have described lowering bond yields as a priority. “Some investors said the Treasury Department is now in a difficult position because expectations for the size of repurchases are high, yet it could be difficult to truly impress the market without relaxing guidelines that it will only buy bonds at prevailing market prices,” the Wall Street Journal wrote. Bessent's efforts to jawbone the bond market have been met with skepticism on Wall Street, given that they aren't tackling the forces pushing yields higher, such rising inflation, the U.S. budget deficit and the war in Iran. President Trump’s promise of a national cash payout for a Republican Party mid-term election victory is also injecting fresh uncertainties into the U.S. Treasury market ahead of today’s 30-year bond auction.

U.S. producer price inflation data out this morning. U.S. producer prices are expected to rise 0.4%, month-over-month, in August, which would mark the strongest increase in three months after remaining unchanged in July and would signal a renewed acceleration in producer-level inflation. Core producer prices, which exclude the more volatile food and energy components, are forecast to rise 0.3% month-on-month, accelerating from the 0.2% increase recorded in July. On an annual basis, headline PPI inflation is expected to accelerate to 5.3%, up from 4.7% in July, while core producer inflation is projected to increase to 4.6% from 4.2% annually.

ECB expected to raise interest rates today. The European Central Bank is expected to raise its key interest rates by 25 basis points today, marking the second hike since the U.S.-Iran war began, while signaling caution over further increases that could weigh on economic activity. The main refinancing rate is expected to rise to 2.65%, and the deposit rate to 2.5%. Eurozone inflation accelerated to 3.3% in August, its highest level in three years and well above the ECB’s 2% target. However, there have been few signs of the second-round inflation effects policymakers typically fear when energy prices surge, as they have since the war closed the Strait of Hormuz. Economists remain unconvinced that further tightening will be necessary, warning that additional hikes could risk recession. Interest-rate futures, however, are pricing in a third hike by December, while policymakers continue to flag upside risks to inflation and the recent rise in bond yields adds further uncertainty to the policy outlook. TradingEconomics.com

Brent crude oil above $102 a barrel, WTI above $97 as U.S.-Iran strikes intensify. Crude oil prices are surging again and are at three-month highs amid little indication that the U.S.- Iran war is abating. Brent, the global benchmark, extended a rally that saw futures jump to triple figures for the first time since July in the previous session. “Renewed fighting over the past week has ended a period of relative calm, and the prospect of a lengthy conflict is fanning renewed fears of energy-driven inflation as prices for natural gas and diesel also surge. Iran has no intention of backing down in the face of an American naval blockade and will escalate its strikes if the U.S. continues attacking its territory, according to a senior official from the Islamic Republic,” and as reported by Bloomberg. Meanwhile, President Trump said the war would only end after the November midterm elections and that significant gasoline price relief would not come before then, signaling little prospect of a near-term de-escalation in the conflict, now in its seventh month.

“Surging Tanker Rates Signal a Deepening Global Energy Crisis.” That’s a Bloomberg headline overnight. “Global tanker freight rates are surging to record levels due to a drawn-out conflict in the Persian Gulf and complex workarounds. Earnings for supertankers on the Middle East-to-China route are at a record of nearly $800,000 a day, and daily earnings for VLCCs (very large crude carrier) are expected to stay above $100,000 a day into next year. The market is stressed with bottlenecks, and freight rates are reacting sharply with no end in sight to the U.S. war in Iran, and traders and shippers expect longer workarounds and inefficient modes of delivery to continue,” said the report. Meantime, an unusually active typhoon season is disrupting shipping operations across Asia, with Shanghai particularly hard hit by snarled traffic and vessel delays. The average waiting time at Chinese ports has increased to 3.38 days per vessel, with Shanghai seeing barely one-fifth of container ships arrive on time in July.

The key outside markets today see the U.S. dollar index slightly higher. October Nymex WTI crude oil prices are higher, hit a three-month high and are trading around $97.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.85%.

Technically, December gold futures bulls next upside price objective is to produce a close above solid resistance at the August high of $4,755.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the June low of $4,015.60. First resistance is seen at this week’s high of $4,488.80 and then at $4,500.00. First support is seen at $4,400.00 and then at this week’s low of $4,381.00. Wyckoff's Market Rating: 4.5

December silver futures bulls see their next upside price objective is closing prices above solid technical resistance at this August high of 72.05. The next downside price objective for the bears is closing prices below solid support at $60.00. First resistance is seen at this week’s high of $68.98 and then at $70.00. Next support is seen at last Friday’s low of $65.335 and then at $65.00. Wyckoff's Market Rating: 5.0