Gold Up On Short Covering, Weaker Greenback

(Kitco News) – Gold prices are moderately higher in early U.S. trading Wednesday, supported on some buying back of previously sold positions (short covering) by the shorter-term futures traders. A lower U.S. dollar index on this day is also supporting some buying interest in the precious metals markets. December gold futures were last up $4.30 an ounce at $1,207.20. December Comex silver was last up $0.035 at $14.22 an ounce.

World stock markets were mixed to firmer overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. There continues to be little to sometimes only modest risk aversion in the world marketplace at present, and that continues to limit the upside in the safe-haven gold and silver markets.

Amid a lack of other fresh fundamental news so far this week, focus remains on the trade war between the U.S. and China. The U.S. hit China with more tariffs this week and China vowed to retaliate. Many traders and investors took note Tuesday of a comment by Alibaba founder Jack Ma, who said the trade dispute between the world’s two largest economies could take decades to resolve. Ma implied that the Chinese culture won’t allow that nation to “give in.” But Americans reckon President Trump won’t either. The U.S.-China trade war and the recent strength of the U.S. dollar have hit emerging markets and their currencies hard the past few months.

The other key outside market today finds Nymex crude oil prices near steady and trading just below $70.00 a barrel.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, new residential construction and the weekly DOE liquid energy stocks report.

Technically, gold bears have the overall near-term technical advantage. However, recent sideways price action favors the bulls and suggests a market bottom is in place. Gold bulls’ next upside near-term price breakout objective is to produce a close in December futures above solid resistance at $1,220.70. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at the August low of $1,167.10. First resistance is seen at this week’s high of $1,209.70 and then at last week’s high of $1,218.00. First support is seen at this week’s low of $1,197.50 and then at last week’s low of $1,192.70. Wyckoff’s Market Rating: 3.0

December 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 $15.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $13.50. First resistance is seen at last week’s high of $14.39 and then at $14.50. Next support is seen at this week’s low of $14.065 and then at last week’s low of $13.965. Wyckoff’s Market Rating: 1.5.

By Jim Wyckoff
For Kitco News


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