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Gold Trades Near Steady Amid Better Risk Appetite

(Kitco News) - Gold prices are near unchanged in early U.S. trading Friday. Buyers of the safe-haven metal are less abundant as traders and investors are less anxious late this week. A firmer U.S. dollar index on this day is also limiting the upside in the precious metals markets. February Comex gold was last down $0.80 at $1,097.50 an ounce. March Comex silver was last up $0.046 at $14.14 an ounce.

World stock markets were mostly higher overnight as crude oil futures prices are posting a solid rebound from the 12-year lows scored earlier this week. Nymex March crude oil was up $1.50 a barrel and above $31.00 as of this writing. Earlier this week Nymex crude prices fell below $27.00 a barrel.

Also bullish for European and Asian stock markets are dovish comments coming from European Central Bank officials on Thursday and Friday, which have set the table for a new round of monetary policy stimulus for the Euro zone, coming as soon as March. There are also notions Japan will embark on more monetary stimulus in the not-too-distant future.

U.S. stock indexes are pointed toward solidly higher openings when the U.S. day session begins. However, price action in the stock indexes has been very choppy and on both sides of unchanged recently.

In other overnight news, the Euro zone composite purchasing managers index (PMI) came in at 53.5 in January versus expectations for a reading of 54.1.

The other key “outside market” on Friday sees the U.S. dollar index firmer, getting a boost from the weaker Euro currency on back of the dovish comments from ECB officials.

U.S. economic data due for release Friday includes the Chicago Fed national activity index, the U.S. flash manufacturing PMI, leading economic indicators and existing home sales.

(Note: Follow me on Twitter--@jimwyckoff--for breaking market news.)

Wyckoff’s Daily Risk Rating: 2.5 (Trader and investor market risk aversion is not elevated today.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 5, with 1 being least risk-averse (most risk-on) and 5 being the most risk-averse (risk-off).

Technically, gold bears still have the overall near-term technical advantage. However, recent price action that has been choppy and sideways does favor the bulls and begins to suggest a market bottom may be in place. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the January high of $1,113.10. Bears' next near-term downside price breakout objective is closing prices below solid technical support at last week’s low of $1,071.10. First resistance is seen at today’s high of $1,102.20 and then at Thursday’s high of $1,106.20. First support is seen at Thursday’s low of $1,092.50 and then at Wednesday’s low of $1,087.10. Wyckoff’s Market Rating: 3.0

Silver bears have the solid overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing December futures prices above solid technical resistance at the December high of $14.64 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the contract low of $13.62. First resistance is at this week’s high of $14.22 and then at the January high of $14.385. Next support is seen at $14.00 and then at last week’s low of $13.73. Wyckoff's Market Rating: 2.0.

By Jim Wyckoff, contributing to Kitco News;
Follow me on Twitter @jimwyckoff



Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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