(Kitco News) – Gold prices are trading around unchanged on the day in early U.S. trading Monday, and are showing resilience in the face of a geopolitical atmosphere that has become more stable just recently. A slumping greenback on the world foreign exchange market is limiting selling interest in the precious metals markets. February gold futures were last up $0.60 an ounce at 1,481.80. March Comex silver prices were last up $0.083 at $17.095 an ounce.
Asian and European stock indexes were higher overnight. The U.S. stock indexes are pointed toward higher openings and at or very near record highs when the New York day session begins. Risk appetite is keener to start the trading week as events last week cleared up a lot of uncertainty in the world marketplace. The U.S. and China have reached a partial trade deal, U.K. Prime Minister Boris Johnson won an election mandate on Brexit, and the U.S. reached a trading deal with its neighbors, Canada and Mexico.
China also got some upbeat economic data Monday, as its industrial output in November was up 6.2%, year-on-year, beating market expectations for a rise of 5.0%. It could be that traders of the safe-haven metals are now more focused more on the bullish aspect of better demand for gold from China if its economy performs better (China is aa leading consumer of gold worldwide), even if the geopolitical situation of the China-U.S. trade war de-escalating is limiting safe-haven demand for gold and silver, globally.
In other overnight news, the Euro zone composite purchasing managers index (PMI) came in at 50.6 in December, which was in line with market expectations. However, the manufacturing PMI was 45.9 versus expectations for a reading of 47.3 in the period. A reading below 50.0 suggests contraction in the sector. Germany’s manufacturing PMI came in at 44.1, also a miss to the downside.
The key “outside markets” today see the U.S. dollar lower. The USDX hit a 4.5-month low last Friday. Meantime, Nymex crude oil prices are near steady and trading around $60.00 a barrel.
U.S. economic data due for release Monday includes the Chicago Fed national activity index and new residential sales.
Technically, the gold bulls and bears are on a level overall near-term technical playing field amid choppy and sideways trading recently. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at $1,500.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,453.10. First resistance is seen at $1,485.00 and then at the December high of $1,491.60. First support is seen at $1,470.00 and then at last week’s low of $1,463.00. Wyckoff’s Market Rating: 5.0.
March silver futures bears have the overall near-term technical advantage amid a more-than-three-month-old downtrend in place on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $17.415 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at last week’s high of $17.185 and then at the December high of $17.415. Next support is seen at $16.82 and then at last week’s low of $16.565. Wyckoff’s Market Rating: 4.5.
By Jim Wyckoff
For Kitco News
Contact jwyckoff@kitco.com
www.kitco.com
