(Kitco News) – Gold and silver prices are modestly up in early U.S. futures trading Thursday. The safe-haven metals bulls have stabilized their markets late this week, despite rallies in global stock markets this week, led by the U.S. stock indexes that are at record highs again. February gold futures were last up $5.30 an ounce at 1,568.10. March Comex silver prices were last up $0.148 at $17.745 an ounce.
Asian and European shares were higher overnight as traders and investors at least for now have pushed aside the coronavirus outbreak in China. U.S. stock indexes are pointed toward higher openings when the New York day session begins and are at or near their record highs.
History proves traders and markets are fickle. The coronavirus outbreak continues to spread, with over 500 reported dead in China and around 30,000 afflicted in the country. China’s domestic commerce is being impacted, as is global commerce. The big drop in Tesla’s stock price Wednesday is blamed at least in part on the coronavirus out break impacting Tesla’s business in China. Many global companies doing business with China (Remember that China is the world’s second-largest economy.) have been negatively impacted. It will not be surprising to this longtime market watcher to see the coronavirus outbreak back on the front burner of the marketplace next week, or sooner. Such a scenario would be bullish for gold, U.S. Treasuries and the U.S. dollar, and bearish for global equities.
Reports overnight said China has moved to lower tariffs on $75 billion in U.S. imports, as part of its recent partial trade agreement with the U.S. Chinese officials also said the plan to cut domestic value-added taxes. The Chinese Finance Ministry said it hopes to eventually eliminate all of the increased trade tariffs on U.S. goods that were implemented during the trade war of the past two years.
The global marketplace showed little reaction to the acquittal of President Trump in his impeachment trial in the Senate. The outcome was not surprising at all.
The key outside markets today see crude oil prices higher and trading around $51.00 a barrel. Meantime, the U.S. dollar index is near steady after hitting a nearly four-month high overnight.
Traders are also awaiting the U.S. employment situation report from the Labor Department that is out Friday morning. The key non-farm payrolls figure is forecast to come in at up around 160,000. However, a strong ADP national employment report reading on Wednesday has some thinking Friday’s jobs report will be stronger than forecast.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, preliminary productivity and costs, and the monthly chain store sales index.
Technically, the gold bulls have the overall near-term technical advantage and have worked to stabilize the market late this week. Bulls are working on restarting a nearly three-month-old price uptrend on the daily chart. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at $1,600.00. 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 $1,571.30 and then at $1,575.00. First support is seen at $1,560.00 and then at the overnight low of $1,556.00. Wyckoff’s Market Rating: 6.5
March silver futures bulls and bears are on a level overall near-term technical playing field amid recent choppy trading. However, a downtrend line is in place on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $18.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.00. First resistance is seen at $18.00 and then at this week’s high of $18.125. Next support is seen at this week’s low of $17.465 and then at the January low of $17.28. Wyckoff’s Market Rating: 5.0.
By Jim Wyckoff
For Kitco News
Contact jwyckoff@kitco.com
www.kitco.com
