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Gold Hits 2-Mo. High On Safe-Haven Demand, Weakening Greenback

(Kitco News) - Gold prices were ending the U.S. day session solidly higher and hit a nearly two-month high Tuesday.  Resurfacing worries about the U.K. leaving the European Union prompted some safe-haven demand for gold today. British Prime Minister Theresa May said at a press conference today the U.K. ostensibly wants completely out of the EU, which is causing uncertainty among many European market participants. February Comex gold was last up $17.40 an ounce at $1,213.70. March Comex silver was last up $0.265 at $17.03 an ounce.

A sharply lower U.S. dollar index that hit a four-week low Tuesday also worked in favor of the precious metal market bulls. President-Elect Donald Trump said in an interview with the Wall Street Journal that the U.S. dollar is “too strong” for fair trading of U.S. goods and services.

Trump will be inaugurated as U.S. president on Friday, and that’s also adding some uncertainty to the world marketplace, which favors gold. Trump’s stated ambitious economic growth plans have so far lacked specifics, which is worrisome to many market watchers.

The other key “outside market” on Tuesday saw Nymex crude oil prices trade modestly higher on bullish remarks from Saudi Arabia’s oil minister, who said that by mid-year the OPEC oil-production cuts will rebalance the world supply and demand situation for oil. There remain stiff technical chart resistance layers that lie just above the crude oil market.

In other overnight news, the German government auctioned a two-year note (Schatz) at a record average low yield of minus 0.75%. The record-low German note yield underscores the keener uncertainty in the European marketplace at present.

The World Economic Forum in Davos, Switzerland, began Tuesday. Movers and shakers from all over the world attend this meeting.

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

Live 24 hours gold chart [Kitco Inc.]

Technically, February gold futures prices closed nearer the session high today and hit a seven-week high. The gold bulls and bears are now on a level overall near-term technical playing field but the bulls have momentum. Prices are in a four-week-old uptrend on the daily bar chart. That suggests prices can continue to trend sideways to higher in the near term. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,236.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,175.00. First resistance is seen at today’s high of $1,218.90 and then at $1,225.00. First support is seen at $1,200.00 and then at $1,187.50. Wyckoff's Market Rating: 5.0

Live 24 hours silver chart [ Kitco Inc. ]

March silver futures prices closed nearer the session high and hit a four-week high today. The silver market bears still have the overall near-term technical advantage. However, the bulls have momentum and there are chart clues that a market bottom is in place. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.30 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.25. First resistance is seen at today’s high of $17.245 and then at $17.30. Next support is seen at today’s low of $16.805 and then at $16.61. Wyckoff's Market Rating: 4.0.

March N.Y. copper closed down 645 points at 262.55 cents today. Prices closed nearer the session low on profit taking after hitting a four-week high last Friday. The copper bulls still have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the November high of 275.30 cents. The next downside price objective for the bears is closing prices below solid technical support at 250.00 cents. First resistance is seen at 266.85 cents and then at 270.00 cents. First support is seen at 260.00 cents and then at 267.50 cents. Wyckoff's Market Rating: 6.5.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com

 

 

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 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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