Gold gains as global equity markets tremble over contagion fears

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(Kitco News) – Gold prices are moderately higher Monday at noon in the US, due to safe-haven demand in a tough start to the trading week for global equity markets. Still, gold bulls must be disappointed that their safe haven metal did not perform better today, given the scale of the losses in US stock indexes. Meanwhile, December silver futures hit a 14-month low today. If selling pressure on global equity markets persists this week, both metals should see better safe-haven demand. October gold futures last rose from $ 9.20 to $ 1,758.60. December’s Comex Silver lost $ 0.167 to $ 22.17 an ounce.

Global stock markets were down sharply in overnight trading. US stock indices are posting heavy losses and lows near the noon session. This is a big trading day during the historically sometimes hectic month of September for the stock and financial markets. The big Chinese real estate developer Evergrande is in great financial difficulty and traders and investors are very worried about a contagion effect. In a morning dispatch, broker SP Angel said the editor of an official Chinese newspaper had previously said that Evergrande was “not too big to fail, suggesting policymakers could let it go. now faces its own Lehman Brothers moment, with the potential to hit and bust other lenders, suppliers and all manner of connected construction companies working on Evergrande’s 1.4 million unfinished properties. ”Financials , real estate and insurance were hit hard in Asia and Europe overnight. Reports indicate that Black Rock, UBS and HSBC are large holders of Evergrande bonds. The China public holiday Monday added to the volatility of the Hong Kong stock market.

The Evergrande crisis comes as the US Federal Reserve holds its two-day monetary policy meeting starting Tuesday morning and ending Wednesday afternoon with a statement and press conference from Fed Chairman Jerome Powell. The market is wondering if a massive sell-off in global equity and financial markets at the start of the week would impact the Fed’s discussion of when to scale back its bond buying program.

Major foreign markets are now seeing the US dollar index rise slightly and hit a four-week high overnight. Nymex crude oil futures prices are lower and are trading around $ 70.50 per barrel. Meanwhile, the yield on the benchmark 10-year US Treasury bond is currently at 1.307%.

Cryptocurrencies are also slammed on Monday, amid risk aversion and recent speculation, major countries like the United States and China will work to regulate them more tightly. Meanwhile, gold prices get a safe haven supply and trade slightly higher on this day. Interestingly, those who have touted cryptos as a safe haven and even as a replacement for gold’s safe haven status seem to be at their word this day, when risk aversion is very high. Many gold bugs have long advocated that when times get really choppy, the true colors of gold and crypto will appear.

Technically, gold bears still have the overall technical advantage in the short term. A two week old downward price trend is in place on the daily bar chart. The Bulls’ next bullish price target is to produce a close above the solid resistance at $ 1,800.00. Bears’ next short-term bearish price target is to push futures prices below strong technical support at $ 1,700.00. First resistance is seen at today’s high of $ 1,766.00 and then at $ 1,775.00. First support is seen at today’s low at $ 1,740.50 and then $ 1,725.00. Wyckoff Market Score: 4.0

Silver bears have a strong overall technical advantage in the short term. The next bullish price target for Silver Bulls is to close the price above strong technical resistance at $ 23.50 an ounce. The next bearish price target for bears is to close price below strong support at $ 21.00. First resistance is seen at today’s high at $ 23.50 and then at $ 23.75. The next support is seen at today’s low at $ 22.025 and then at $ 21.75. Wyckoff Market Rating: 1.0.

December NY copper closed 1365 points lower at 410.95 cents today. Prices closed near the session low and hit a four week low today. Copper bears have gained the overall technical advantage in the short term. The next bullish price target for copper buyers is to push and close prices above strong technical resistance at the September high of 447.15 cents. The next bearish price target for bears is to close prices below strong technical support at the August low of 396.65 cents. First resistance is seen at 420.00 cents, then at today’s high of 424.60 cents. First support is seen at today’s low at 410.00 cents and then 405.00 cents. Wyckoff Market Rating: 4.0.