(Kitco News) – Gold prices are holding good gains and scored a 10-week high in early U.S. trading Monday. Some more safe-haven demand, technical buying and short covering are boosting the yellow metal. December gold futures were last up $11.90 an ounce at $1,234.00. December Comex silver was last up $0.135 at $14.77 an ounce.
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. There is still risk aversion in the marketplace after last week’s high volatility in the world stock markets, led by the U.S. stock indexers that hit 3.5-month lows.
Gold is getting some safe-haven buying interest due in part to the growing rift between the U.S. and Saudi Arabia regarding a missing Saudi journalist who many think was killed by the Saudi Kingdom. President Trump said there would be “severe punishment” of the Saudi Kingdom if it was determined it killed the journalist. A Saudi government official said his country could retaliate against the U.S. by driving crude oil up to a price of over $100 or $200 a barrel, or higher.
The key outside markets today find the U.S. dollar index lower on a corrective pullback from recent gains. Meantime, November Nymex crude oil prices are firmer on a corrective bounce from recent selling pressure that begins to suggest that market has topped out.
U.S. economic data due for release Monday includes retail sales, the Empire State manufacturing survey, and manufacturing and trade inventories.
Technically, gold price action last week produced a big and bullish upside “breakout” from a sideways trading range on the daily bar chart. This suggests a market bottom is in place and that prices can trend sideways to higher for at least the near term. Gold bulls’ next upside near-term price breakout objective is to produce a close in December futures above solid resistance at $1,250.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,200.00. First resistance is seen at today’s high of $1,236.90 and then at $1,240.00. First support is seen at $1,225.00 and then at today’s low of $1,220.40. Wyckoff’s Market Rating: 6.0
December silver futures bears still have the overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $15.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the September low of $13.965. First resistance is seen at the overnight high of $14.805 and then at the October high of $14.95. Next support is seen at $14.54 and then at last week’s low of $14.255. Wyckoff’s Market Rating: 3.5.
By Jim Wyckoff
For Kitco News