Gold Up, Hits 2.5-Mo. High, On More Safe-Haven and Technical Buying
Monday February 06, 2017 08:17
(Kitco News) - Gold prices are higher and have pushed to another 2.5-month high in early U.S. trading Monday. A somewhat nervous world marketplace at present is working in favor of the safe-haven gold market. The near-term chart postures for gold and silver have significantly improved recently, which is inviting more technically related buying interest. April Comex gold was last up $9.40 an ounce at $1,230.20. March Comex silver was last up $0.141 at $17.62 an ounce.
It’s a light week for U.S. economic reports, so traders and investors will still be focusing upon proclamations from U.S. President Donald Trump. On Friday, Trump took action to roll back the Dodd-Frank banking regulations. Later this week Trump meets with Japanese Prime Minister Shinzo Abe. The new U.S. president’s “loose cannon” approach to running the U.S. has many world market participants anxious, and that’s bullish for gold.
The marketplace is still buzzing a bit about Friday’s U.S. employment report from the Labor Department. While the key non-farm payrolls number beat market expectations to the upside, the slowdown in U.S. wage growth leads many to believe the Federal Reserve may have to slow down its intended pace of interest rate increases this year. Such a scenario favors the raw commodity market bulls, who arguably in recent years have mostly benefitted from extremely low U.S. interest rates.
The U.S. dollar index is slightly higher on a corrective bounce after hitting a 2.5-month low late last week. The dollar index is in a four-week-old downtrend on the daily bar chart and the greenback bears have the near-term technical advantage.
The other key “outside market” on Monday sees Nymex crude oil prices trading slightly higher. Oil prices are trading in the upper boundary of the recent sideways and choppy trading range. Stiff technical resistance layers are located just above the market.
U.S. economic data due for release Monday is light and includes the employment trends index.
(Note: Follow me on Twitter--@jimwyckoff--for breaking market news.)
Technically, April gold futures bulls have gained the slight overall near-term technical advantage. Prices are in a seven-week-old uptrend on the daily bar chart. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,238.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,2.00.00. First resistance is seen at $1,238.00 and then at $1,250.00. First support is seen at the overnight low of $1,220.00 and then at $1,210.00. Wyckoff’s Market Rating: 5.5
March silver bulls and bears are on a level overall near-term technical playing field. Prices are in a six-week-old uptrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing futures prices above solid technical resistance at $18.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.635. First resistance is seen at last week’s high of $17.745 and then at $18.00. Next support is seen at the overnight low of $17.46 and then at $17.26. Wyckoff's Market Rating: 5.0.