Gold Prices Back Off Amid Keener Risk Appetite

(Kitco News) – Gold prices are moderately lower in early U.S. trading Tuesday, pressured by upbeat trader and investor attitudes on this first full week of the new year. A rebound in the U.S. dollar index on this day is also a negative for the precious metals markets. Still, the bulls can argue the price weakness is a normal corrective pullback following recent gains that pushed gold to a six-month high late last week. February gold futures were last down $7.80 an ounce at $1,282.00. March Comex silver was down $0.101 at $15.655 an ounce.

European stock markets were mostly higher overnight, but Asian shares were slightly down. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Perceived progress on U.S.-China trade talks presently taking place in Beijing, ideas of a more dovish Federal Reserve monetary policy in 2019, and a solid U.S. jobs report last week have perked up traders and investors so far this week.

The upbeat attitudes in Asia were somewhat dented today after technology giant Samsung said its fourth-quarter profits will drop 29% due to “mounting macro uncertainties.” The downbeat Samsung news follows a dour outlook issued by Apple last week.

The U.S. government shutdown is into its third week, but the matter is garnering less attention from the marketplace and is not a front-burner issue. President Trump will address U.S. citizens in a speech on a U.S. southern border wall Tuesday evening.

The key outside markets today see the U.S. dollar index higher on a corrective bounce after hitting a two-month low on Monday. The USDX has been trending sideways to lower on the daily chart for three weeks. Meantime, Nymex crude oil prices are higher and trading just above $49.00 a barrel. There are chart clues the oil market has bottomed out, but the bulls still have heavy lifting to do to suggest a price uptrend can be sustained.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales report, the NFIB small business optimism index, the international trade report (not issued because of government shutdown), and the World Bank global economic prospects report.

Technically, the gold bulls have the overall near-term technical advantage. Prices are in a seven-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 $1,291.40 and then at Monday’s high of $1,297.00. First support is seen at last week’s low of $1,278.10 and then at $1,275.00. Wyckoff’s Market Rating: 6.5

March silver futures bulls have the overall near-term technical advantage. A seven-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 $15.00. First resistance is seen at Monday’s high of $15.88 and then at last week’s high of $15.955. Next support is seen $15.50 and then at $15.385. Wyckoff’s Market Rating: 6.0.

By Jim Wyckoff
For Kitco News


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