Gold Up On Short Covering, Some Safe-Haven DemandBy Jim Wyckoff of Kitco News
Monday January 30, 2017 13:25
(Kitco News) - Gold prices ended the U.S. day session moderately higher on a corrective rebound from recent selling pressure that saw prices hit a three-week low last Friday. A lower U.S. dollar index on this day also aided the precious metals market bulls. There was even a bit of safe-haven demand seen in the gold market. April Comex gold was last up $7.30 an ounce at $1,198.30. March Comex silver was last down $0.001 at $17.135 an ounce.
The world marketplace is still a bit nervous regarding actions the new U.S. president has taken or may take. Over the weekend President Trump banned immigration from several countries the new administration has deemed as sponsoring or harboring terrorists. This uncertainty and related world stock market weakness is at least a mildly bullish element for the safe-haven gold market. Trump appears to want to “get of the gate” fast on his new presidency, and that is worrisome to some who think his early decisions may not be well-thought-out.
Markets in China, Hong Kong and South Korea were closed Monday for the Lunar New Year holiday.
The U.S. dollar index started out modestly higher Monday morning, on a corrective bounce after hitting a six-week low last week. However, the greenback faded as the U.S. day session progressed, falling to moderately lower levels in afternoon trading. Recent selling pressure has produced technical clues the dollar index has put in a near-term market top. The dollar index is in a near-term price downtrend.
The other key “outside market” on Monday saw Nymex crude oil prices trading lower in afternoon action. The latest U.S. rig count shows U.S. shale oil production is on the rise, which is limiting the upside in crude oil. U.S. oil production is currently around 9 million barrels a day and rising.
Key U.S. data out this week includes the FOMC meeting on Tuesday and Wednesday, and the Labor Department’s employment situation report on Friday morning.
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Technically, April gold futures prices closed nearer the session high. The gold bears still have the overall near-term technical advantage. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the January high of $1,223.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,160.00. First resistance is seen at today’s high of $1,201.30 and then at $1,205.00. First support is seen at today’s low of $1,190.00 and then at last week’s low of $1,182.60. Wyckoff's Market Rating: 3.5.
March silver futures closed up $0.04 at $17.14 today. Prices closed nearer the session low today. The silver market bears have the near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the January high of $17.36 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at today’s high of $17.295 and then at $17.36. Next support is seen at $17.00 and then at last week’s low of $16.635. Wyckoff's Market Rating: 3.5.
March N.Y. copper closed down 310 points at 265.85 cents today. Prices closed nearer the session low and scored a bearish “outside day” down on the daily bar chart. Profit taking was featured. The copper bulls still have the firm 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 270.00 cents and then at last week’s high of 273.20 cents. First support is seen at today’s low of 263.40 cents and then at 261.00 cents. Wyckoff's Market Rating: 7.0.