(Kitco News) – Gold and silver prices are modestly lower in early U.S. trading Thursday, but have significantly trimmed overnight losses following some downbeat U.S. economic data that was just released. Still, a muscular U.S. dollar this week is keeping the precious metals market bulls squelched. April gold futures were last down $1.20 an ounce at $1,314.00. March Comex silver was last down $0.067 at $15.585 an ounce.
The just-released U.S. retail sales for December were down 1.2% from November, which was weaker than the expected rise of 0.1%. The reading was the steepest monthly decline in 10 years. The U.S. producer price index report for January showed a fall of 0.1%. A rise of 0.1% was expected. This continues a string of non-problematic inflation data coming from the major world economies. And weekly jobless claims rose by 4,000. All this data plays into the hands of the U.S. monetary policy doves, who want to see the Fed hold off on raising interest rates, and maybe even lower them a bit in 2019.
Asian and European stock markets were higher again overnight. U.S. stock indexes have hit two-month highs this week and are pointed toward firmer openings when the New York day session begins. Trader and investor risk appetite in the marketplace this week remains keener.
The U.S.-China high-level trade talks taking place in Beijing remain on the front burner. U.S. Treasury Secretary Mnuchin and U.S. Trade Representative Lighthizer are scheduled to participate in the discussions today and Friday. China President Xi Jinping may meet with the U.S. delegation on Friday, as a show of good will. President Trump on Wednesday said the talks are going “very well.” The rally in world stock markets just recently is due in part to optimism the U.S. and China will reach at least a limited deal by the March 1 deadline imposed by the U.S.
The marketplace has also been assuaged this week by the high likelihood that Trump will sign a U.S. budget compromise between the Democrats and Republicans, despite the agreement not having as much money appropriated for a border wall with Mexico.
In overnight news, China’s exports jumped 9.1% in January, which was above expectations. However, Chinese imports were reported down 1.5%. Both figures were year-on-year. Imports from the U.S. were down 41.2% from the same time last year.
Meantime, the Euro zone reported its GDP at up 0.2% in the fourth quarter from the third quarter, and up 1.2%, year-on-year. Those numbers were right in line with market expectations, but show a somewhat anemic Euro zone economy.
The key outside markets today see the U.S. dollar index firmer and near its 2018 high scored in December. Nymex crude oil prices are firmer and trading around $54.50 a barrel. The oil market has been trading sideways for two weeks, as stiff chart resistance at and just above $55.00 has stalled an uptrend.
U.S. economic reports due for release Thursday include the weekly jobless claims report, the producer price index report, retail sales, and manufacturing and trade inventories.
Technically, the April gold bulls still have the overall near-term technical advantage. Prices are still in a 2.5-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at the January high of $1,331.10. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,300.00. First resistance is seen at this week’s high of $1,321.70 and then at last week’s high of $1,323.60. First support is seen at today’s low of $1,304.70 and then at $1,300.00. Wyckoff’s Market Rating: 6.5
March silver futures bulls have the near-term technical advantage. A 2.5-month-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 January high of $16.20 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 the overnight high of $15.65 and then at this week’s high of $15.83. Next support is seen at today’s low of $15.445 and then at $15.30. Wyckoff’s Market Rating: 6.0.
By Jim Wyckoff
For Kitco News