Gold, Silver Prices Weaker Amid Bearish Outside Markets

(Kitco News) – Gold and silver prices are moderately lower in early U.S. trading Thursday, pressure by outside forces that include a stronger U.S. dollar, lower crude oil prices and firmer U.S. stock indexes. Some technical selling is also likely occurring in both metals, as their near-term chart postures have deteriorated a bit recently. February gold futures were last down $5.50 an ounce at $1,278.50. March Comex silver was down $0.085 at $15.29 an ounce.

The European Central Bank’s regular monetary policy meeting just ended with no change in policy, as expected. Traders are now awaiting ECB President Mario Draghi’s press conference.

European and Asian stock markets were mixed but mostly higher overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. Traders and investors pointed to generally upbeat U.S. corporate earnings reports as supporting buying interest in equities, which has pushed the U.S. indexes to four-week highs this week. The U.S. indexes remain in near-term price uptrends on the daily bar charts.

In other overnight news, the Euro zone Markit purchasing managers index (PMI) showed a composite reading of 50.7 in January from 51.1 in December. That’s yet another sign of a gradually slowing Euro zone economy. The January PMI reading was the lowest in five years.

Reports overnight said the Microsoft search engine “Bing” has disappeared from China’s internet users’ screens. China heavily censors the internet. This won’t help U.S.-China trade relations when the two sides hold high-level trade talks in Washington, D.C., next week.

The partial U.S. government shutdown drags on, along with the lack of U.S. economic data to drive many markets. A top Trump administration economic advisor on Wednesday said the shutdown could prompt zero growth in the U.S. economy in the first quarter of 2019.

The outside markets today see the U.S. dollar index trading higher. Meantime, Nymex crude oil prices are slightly lower and trading around $52.50 a barrel. Political turmoil in Venezuela, including the U.S. recognizing the opposition leader as leader of the country, is a potentially bullish element for the oil market. The U.S. may sanction Venezuelan oil exports.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the U.S. flash services PMI, the U.S. flash manufacturing PMI, leading economic indicators, the Kansas City Fed manufacturing survey, and the weekly DOE liquid energy stocks report.

Technically, the gold bulls have the overall near-term technical advantage but have faded recently. Prices are still in a two-month-old uptrend on the daily bar chart, but just barely. 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 this week’s high of $1,286.00 and then at $1,292.20. First support is seen at this week’s low of $1,276.00 and then at $1,270.00. Wyckoff’s Market Rating: 6.0

March silver futures bulls are fading. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the January high of $15.955 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 this week’s high of $15.445 and then at $15.60. Next support is seen at this week’s low of $15.195 and then at $15.00. Wyckoff’s Market Rating: 5.5.

By Jim Wyckoff
For Kitco News


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