Gold Higher As Risk Aversion Returns To Marketplace
Tuesday March 08, 2016 08:35
(Kitco News) - Gold prices are higher and close to last week’s 13-month high in morning trading Tuesday. The yellow metal bulls are enjoying some more safe-haven buying interest coming into the market. April Comex gold was last up $10.40 at $1,274.30 an ounce. May Comex silver was last down $0.013 at $15.61 an ounce.
There is keener risk aversion in the marketplace Tuesday. World stock markets were mostly lower, pressured by weak import and export data coming out of China, the world’s second-largest economy. China’s exports showed their largest decline in five years in February. Imports were also down sharply in February.
U.S. stock indexes were pointed toward lower openings when the day session begins Tuesday.
The key “outside markets” on Tuesday find the U.S. dollar index near steady and crude oil prices slightly higher, with Nymex April futures hovering above $38.00 a barrel.
In overnight news, the Euro zone four-quarter 2015 GDP came in at up 0.3% in the quarter, and was up 1.6% for the entire year of 2015.
The Paris-based OECD think tank forecast the world economy to see slowing growth in the coming months, including in the U.S., the U.K., Germany, Brazil, Canada and Russia.
The focus of traders and investors this week is the Thursday meeting of the European Central Bank. Many believe the ECB this week will announce further monetary policy stimulus measures by pushing interest rates further into negative territory, in an effort to jumpstart the moribund Euro zone economy.
U.S. economic data due for release Tuesday is again light and includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, and the NFIB small business index.
(Note: Follow me on Twitter--@jimwyckoff--for breaking market news.)
Wyckoff’s Daily Risk Rating: 3.5 (Trader and investor market risk aversion is 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, April gold futures prices are in a 2.5-month-old uptrend on the daily bar chart and the bulls have the solid overall near-term technical advantage. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,238.00. First resistance is seen at last week’s high of $1,280.70 and then at $1,285.00. First support is seen at the overnight low of $1,264.20 and then at Monday’s low of $1,257.40. Wyckoff’s Market Rating: 8.0
May silver bulls and bears are on a level overall near-term technical playing field but the bulls have just gained upside momentum recently. Silver bulls’ next upside price breakout objective is closing futures prices above solid technical resistance at the February high of $16.005 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at last week’s low of $14.61. First resistance is at last week’s high of $15.84 and then at $16.005. Next support is seen at Monday’s low of $15.495 and then at $15.15. Wyckoff's Market Rating: 5.0.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff
