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Gold Prices Firmer On Some Risk Aversion

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(Kitco News) - Gold prices are modestly up in early U.S. trading Monday. The safe-haven metal is benefitting from a bit of risk aversion seen in the marketplace to start the trading week as U.S.-China trade tensions are rising. A weaker U.S. dollar index today is also working in favor of the precious metals market bulls. December gold futures were last up $3.30 an ounce at $1,204.60. December Comex silver was last up $0.016 at $14.375 an ounce.

The big news in the metals industry today sees Barrick Gold Corp. moving to acquire Randgold Resources Ltd. in an all-stock merger that will create the largest gold-mining company in the world. Based on Friday’s closing prices, the new company would have market capitalization of $18.3 billion.

World stock markets were mostly lower overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. There is a bit more risk aversion in the world marketplace to start the trading week, as U.S.-China trade tensions are back on the front burner after China accused President Trump of being a trade bully and cancelled trade talks that had been set up for this week. And tariffs on $200 billion more in Chinese imports to the U.S. are set to kick in today. Stocks markets in China, Japan and South Korea were closed Monday for a holiday.

Focus this week will also be the Federal Reserve’s two-day Open Market Committee (FOMC) meeting that begins Tuesday. The FOMC is expected to slightly raise U.S. interest rates at this meeting. Fed Chairman Jerome Powell will also hold a press conference after the meeting.

The key outside markets today find the U.S. dollar index lower. Prices Friday hit a 2.5-month low. The greenback bears have downside technical momentum to suggest a market top is in place for the USDX. Meantime, November Nymex crude oil prices are solidly higher and hit a contract high today, and trading just above $72.00 a barrel.  

U.S. economic data due for release today includes the Chicago Fed national activity index and the Texas manufacturing outlook survey.

Live 24 hours gold chart [Kitco Inc.]

Technically, gold bears have the overall near-term technical advantage. However, recent sideways price action favors the bulls and suggests a market bottom is in place. Gold bulls' next upside near-term price breakout objective is to produce a close in December futures above solid resistance at $1,220.70. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the August low of $1,167.10. First resistance is seen at Friday’s high of $1,215.80 and then at last week’s high of $1,218.00. First support is seen at $1,200.00 and then at Friday’s low of $1,196.00. Wyckoff's Market Rating: 3.0

Live 24 hours silver chart [ Kitco Inc. ]

December silver futures bears have the solid overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $15.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $13.50. First resistance is seen at last week’s high of $14.465 and then at $14.59. Next support is seen at $14.18 and then at last week’s low of $14.065. Wyckoff's Market Rating: 2.5.

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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