(Kitco News) – Gold prices are modestly up in early U.S. trading Thursday, on some follow-through strength after Wednesday’s gains. February gold futures were last up $2.30 an ounce at $1,232.10. March Comex silver was down $0.065 at $14.395 an ounce.
The marketplace is still buzzing about Fed Chairman Jerome Powell’s dovish remarks on U.S. monetary policy in a speech to the Economic Club of New York Wednesday. His comments sparked rallies in the gold and silver markets. Powell said at present, U.S. interest rates are just below “neutral” levels and that the Fed will remain data dependent, with no set path on adjusting interest rates. Traders and investors interpreted Powell’s comments as meaning the Fed will likely raise interest rates slightly at its December meeting, but after that all bets are off. Prior to Powell’s speech, the sense of the marketplace was that the Federal Reserve would continue on a gradual rate-hike course in 2019. Powell also intimated that U.S. inflation is not at all problematic at present. The U.S. stock market rallied strongly on the news, while the U.S. dollar index sold off moderately. Traders will get an update on Federal Reserve policy discussion when the FOMC minutes are released this afternoon.
European stock markets were also mostly higher overnight. Asian stock indexes were also mostly firmer. U.S. stock indexes are pointed toward weaker openings when the New York day session begins, following strong gains Wednesday. The U.S. stock index bulls are having a very good week, so far.
Focus this week is also on the upcoming Group of 20 meetings that begin Friday in Argentina and will feature a face-to-face meeting between the U.S. and Chinese presidents on Saturday. The world’s two largest economies are locked in a heated trade war.
In overnight news, the European Central Bank issued a warning regarding the growing risks to the Euro zone financial sector. Trade disputes, Brexit and high debt levels of member countries were cited by the ECB as worrisome elements.
The key outside markets today find Nymex crude oil futures prices lower and hitting a 13-month low of $49.41 a barrel. Rising U.S. oil inventories are prompting the fresh selling pressure. Crude prices are down around 30% following the recent sharp declines. A key OPEC oil cartel meeting is scheduled for next week in Vienna, Austria.
The other key outside market today finds the U.S. dollar index trading firmer.
U.S. economic data due for release Thursday includes the weekly jobless claims report, personal income and outlays, pending home sales and the FOMC minutes.
Technically, gold bears still have the overall near-term technical advantage. However, more gains this week would negate a near-term price downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at the November high of $1,252.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at the November low of $1,202.40. First resistance is seen at last week’s high of $1,236.70 and then at $1,245.00. First support is seen at the overnight low of $1,226.70 and then at $1,220.00. Wyckoff’s Market Rating: 3.5
March silver futures bears have the solid overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the October high of $15.055 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the November low of $13.985. First resistance is seen at this week’s high of $14.545 and then at last week’s high of $14.66. Next support is seen at this week’s low of $14.185 and then at $14.00. Wyckoff’s Market Rating: 2.0.
By Jim Wyckoff
For Kitco News