Gold At 10-Mo.High; Powerful Bulls Want More

(Kitco News) – Gold prices are modestly up and hit another 10-month high in early U.S. trading Wednesday. Chart-based buying is featured this week in both gold and silver markets, as both metals have seen their technical postures improve just recently. More accommodative monetary policies from the world’s major central banks are also working in favor of the commodity market bulls. April gold futures were last up $1.70 an ounce at $1,346.50. March Comex silver was last up $0.033 at $16.00 an ounce.

Asian and European stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. The U.S. stock indexes remain in near-term price uptrends and they are near their recent 2.5-month highs.

At mid-week there appears to be slightly more optimism in the ongoing U.S.-China trade talks, taking place this week in Washington, D.C. President Trump on Tuesday said there could be flexibility on the early-March deadline for more U.S. trade tariffs to be imposed on China. Ideas are still widely mixed on whether any final deal will be reached any time soon. China’s state media Wednesday said there would be catastrophic economic consequences if the U.S. slapped new sanctions on China.

The U.S. economic data point of the day is the Federal Reserve’s FOMC minutes that are due out in the afternoon. The minutes will be closely scrutinized by traders and investors. The recent change in Fed policy stance to one of more accommodative monetary conditions has been a significantly bullish underlying factor for several commodity markets, including the precious metals. It’s also been bullish for world stock and bond markets.

The U.K. Brexit saga continues to play out, as four MP’s that were aligned with Prime Minister Theresa May dropped their affiliation with her. There is still no deal in place as the late-March deadline approaches for the U.K. to leave the European Union.

The key outside markets today see the U.S. dollar index slightly higher after seeing a corrective pullback Tuesday, after hitting a two-month high last Friday. Nymex crude oil prices are slightly lower after hitting a three-month high on Tuesday. Prices are in a good uptrend from the Dec. 24 low of just above $42.50 a barrel.

Other U.S. economic reports due for release Wednesday include the MBA mortgage applications survey, and the weekly Johnson Redbook and Goldman Sachs retail sales reports.

Technically, the April gold bulls have the solid overall near-term technical advantage. Prices are in a 2.5-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at $1,375.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,320.00. First resistance is seen at $1,350.00 and then at $1,360.00. First support is seen at today’s low of $1,342.40 and then at $1,331.10. Wyckoff’s Market Rating: 7.5

March silver futures bulls have the near-term technical advantage. A 2.5-month-old uptrend is in place on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the January high of $16.20 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the February low of $15.445. First resistance is seen at the overnight high of $16.06 and then at $16.20. Next support is seen at the overnight low of $15.935 and then at Monday’s low of $15.715. Wyckoff’s Market Rating: 6.5.

By Jim Wyckoff
For Kitco News

Contact jwyckoff@kitco.com
www.kitco.com

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