(Kitco News) – Gold prices are higher and hit a three-week high in early U.S. futures trading Monday. Safe-haven demand for gold and silver prices is featured as the weekend saw the coronavirus outbreak spread significantly. However, gains in the metals are being somewhat tempered by the steep drop in crude oil prices, which hit a 3.5-month low overnight. February gold futures were last up $11.70 an ounce at 1,583.60. March Comex silver prices were last up $0.162 at $18.275 an ounce.
Asian and European stock markets were solidly down overnight. U.S. stock indexes are pointed toward sharply lower openings when the New York day session begins. Over the weekend the coronavirus illness that apparently originated in China has rapidly spread, killing at least 80 of its citizens, with nearly 8,500 cases now reported in China. Several Chinese cities are under quarantine.
Several cases are now reported in the U.S. as doctors are now saying the illness is more easily contractable. There are increasing worries the outbreak could hurt world economic growth. Raw commodity prices, including crude oil, are slumping. Safe-haven gold prices are higher Monday. This week is the Chinese Lunar New Year holiday—the most important holiday in China. Chinese authorities have extended the week-long holiday by two days due to the coronavirus outbreak.
Reports of a Boeing jetliner crashing in Afghanistan are further unsettling the marketplace. Details on the purported crash are sketchy with Boeing officials currently denying one of their planes has crashed.
The key outside markets today see crude oil prices sharply lower, at a 3.5-month low, and trading around $52.35 a barrel. Meantime, the U.S. dollar index is slightly higher and hit a seven-week high overnight, as the USDX is trending up.
Technically, the gold bulls have the firm overall near-term technical advantage, but the January spike high is still strong chart resistance to overcome. A price uptrend is in place on the daily chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at the January high of $1,613.30. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,550.00. First resistance is seen at the overnight high of $1,588.40 and then at $1,600.00. First support is seen at the overnight low of $1,575.30 and then at $1,565.00. Wyckoff’s Market Rating: 7.0.
March silver futures bulls have regained the slight overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the January high of $18.895 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the January low of $17.59. First resistance is seen at the overnight high of $18.375 and then at $18.50. Next support is seen at the overnight low of $18.145 and then at $18.00. Wyckoff’s Market Rating: 5.5.
By Jim Wyckoff
For Kitco News
Contact jwyckoff@kitco.com
www.kitco.com
