Gold holds Tuesday’s strong gains as the crypto market remains volatile

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(Kitco News) – Gold and silver prices are holding close to stable price levels in mid-day US trading on Wednesday. The bulls still have technical momentum that suggests more price upside in the short term. Some safe haven demand has been featured in the precious metals markets over the past day or so as cryptocurrency markets have become very shaky. Gains in the metals today were capped by a higher US dollar index and lower crude oil prices. December gold was last up $1.00 at $1,717.00 and December silver was down $0.102 at $21.39.

The marketplace is still buzzing about the turmoil in cryptocurrency markets on Tuesday that spilled over into safe-haven buying in gold and silver. The crypto exchange FTX suffered a major liquidity crisis and had to be absorbed by its larger rival Binance. The cryptos remain volatile on Wednesday, in the wake of Tuesday’s shock. The cryptos are just like other markets. When a crisis of confidence occurs, traders and investors all running for the exit door at the same time create a severe liquidity crisis.

Global stock markets were mostly lower overnight. US stock indexes are lower at midday. The US midterm elections proved the pollsters wrong as there was no “Republican wave” of victories. It looks like Republicans will have a slim majority in the House of Representatives, but Democrats look set to retain control of the Senate. However, several key races in both the House and the Senate have not been decided, and which could still tip the scales. Still, if history proves correct, a divided Congress that can’t pass new legislation favors stock market bulls.

The main outside markets today see the US dollar index higher. Nymex crude oil prices are lower and are trading around $87.00 per barrel. Oil prices have fallen this week on concerns of reduced demand from China, due to rising Covid cases there. The 10-year US Treasury bond yields 4.107%.

Traders are eagerly awaiting the next US inflation report on Thursday morning, with the release of the Consumer Price Index report for October, which is expected to rise 7.9% year-on-year, compared with the 8.2% rise in the September report.

Technically, December futures prices hit a four-week high today. The gold futures bears have the slight overall technical advantage in the short term. However, bulls have momentum as a price downtrend on the daily bar chart has been negated. Prices this week have also seen a bullish upside break from a trading area, suggesting even more upside in the near term. Bull’s next upside price target is to produce a close above solid resistance at $1,800.00. Bears’ next short-term downside price objective is to push futures prices below solid technical support at the November low of $1,618.30. First resistance is seen at today’s high of $1,725.80 and then at the October high of $1,738.70. First support is seen at $1,700.00 and then at $1,675.00. Wyckoff’s market rating: 4.5.

December silver futures hit a more than three-month high on Tuesday. The silver bulls have the overall technical advantage in the short term. Prices are in a choppy two-month-old uptrend on the daily bar chart. Silver Bull’s next upside price objective is to close prices above solid technical resistance at $23.00. The next downside price objective for the bears is to close prices below solid support at $20.00. First resistance is seen at this week’s high of $21.72 and then at $22.00. The next support is $21.00 and then this week’s low of $20,435. Wyckoff’s market rating: 6.5.

December NY copper closed up 190 points to 370.10 cents today. Prices closed closer to the session high and hit a nine-week high today. The coppers and bears are back on an even technical playing field in the near term. Copper Bull’s next upside price objective is to push and close prices above solid technical resistance at 400.00 cents. The next downside price objective for the bears is to close prices below solid technical support at the October low of 330.30 cents. First resistance is seen at today’s high of 374.80 cents and then at the August high of 378.35 cents. First support is seen at this week’s low of 356.25 cents and then 350.00 cents. Wyckoff’s Market Rating: 5.0.