(Kitco News) – Gold prices are moderately up and scored a six-month high in early U.S. trading Wednesday, on more safe-haven buying interest amid a still very wobbly U.S. stock market. The yellow metal is now closing in on psychological resistance at the $1,300.00 level, which if cleared would attract even more buyer interest. Meantime, silver prices hit a 4.5-month high overnight. February gold futures were last up $6.00 an ounce at $1,287.30. March Comex silver was down $0.07 at $15.47 an ounce.
European and Asian stock markets were mostly down overnight. U.S. stock indexes are pointed toward solidly lower openings when the New York day session begins, starting off the new year in inauspicious fashion. For the year 2018, the U.S. stock indexes lost around 5%, which is the worst performance in 10 years.
Global equities are reacting negatively to more weak economic data coming out of China, the world’s second-largest economy. The Caixin manufacturing purchasing managers index (PMI) fell to 49.7 in December, showing contraction in the sector (below 50.0) for the first time in a year and a half.
There was also some weaker economic data coming out of the European Union, to also un-nerve traders and investors.
Lingering concerns about the U.S. government shutdown that is well into its second week, and about the monetary policy of the Federal Reserve in the coming months, are also weighing on trader and investor sentiment to start the year.
The key outside markets today see the U.S. dollar index firmer. Meantime, Nymex crude oil prices are lower and trading around $45.00 a barrel.
U.S. economic data due for release Wednesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the U.S. manufacturing purchasing managers index (PMI) and the global manufacturing PMI.
Technically, gold prices have recently pushed above the key 200-day moving average for the first time since last May. The bulls have the firm overall near-term technical advantage. Prices are in a six-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 $1,300.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,260.00. First resistance is seen at the overnight high of $1,291.00 and then at $1,300.00. First support is seen at the overnight low of $1,280.80 and then at $1,275.00. Wyckoff’s Market Rating: 6.5.
March silver futures bulls have the overall near-term technical advantage. A six-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 $16.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.75. First resistance is seen at the overnight high of $15.58 and then at $15.85. Next support is seen at the overnight low of $15.385 and then at $15.25. Wyckoff’s Market Rating: 5.5.
By Jim Wyckoff
For Kitco News