(Kitco News) – Gold prices are modestly up in early U.S. trading Tuesday. Some mild safe-haven demand has surfaced for gold early this week, amid Brexit turmoil and on the surprising resignation of India’s central bank head. The technical chart posture for gold has also turned bullish recently. Meantime, silver prices hit a four-week high overnight. February gold futures were last up $2.60 an ounce at $1,251.90. March Comex silver was up $0.14 at $14.745 an ounce.
Brexit turmoil and uncertainty regarding when and how the U.K. will depart the European Union still have European stock and financial markets a bit unsettled. Prime minister Theresa May Monday called off Tuesday’s vote on her Brexit plan, which most reckoned would be voted down anyway. The Euro currency and British pound sunk on the news.
In overnight news, Indian stock and financial markets gyrated after India’s central bank chief abruptly quit. The Indian rupee dropped sharply on the news. There was also likely some safe-haven demand for gold coming out of India on the news.
World stock markets were mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins, following a big rebound Monday afternoon from steep losses seen in the morning.
The world marketplace was encouraged that a high-level telephone call took place Monday between trade officials of the U.S. and Chinese government. The two sides have until March 1 to reach a trade deal, or the U.S. has threatened to levy more trade penalties against China.
The key outside markets are in a friendly posture for the precious metals markets today. The U.S. dollar index is lower on a corrective pullback from solid gains posted Monday. Meantime, Nymex crude oil prices are modestly up after selling pressure seen Monday. There are still no early technical clues the crude oil market is close to a bottom.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, and the producer price index.
Technically, gold bulls have the overall near-term technical advantage and still have momentum on their side. Prices are in a four-week-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at the July high of $1,284.10. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,225.00. First resistance is seen at Monday’s high of $1,256.60 and then at $1,260.00. First support is seen at Monday’s low of $1,246.90 and then at $1,240.00. Wyckoff’s Market Rating: 6.0
March silver futures bears still have the overall near-term technical advantage. However, a choppy three-week-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 October high of $15.055 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the November low of $13.985. First resistance is seen at $15.00 and then at the October high of $15.055. Next support is seen at Monday’s low of $14.565 and then at last week’s low of $14.28. Wyckoff’s Market Rating: 3.0.
By Jim Wyckoff
For Kitco News
Contact jwyckoff@kitco.com
www.kitco.com
