Gold Sees Corrective Pullback From Recent Gains
(Kitco News)Â - Gold prices are modestly down in early-afternoon U.S. trading on a quieter Wednesday, on some normal backing and filling on the charts following recent good gains that pushed prices to a five-week high on Tuesday. February gold futures were last down $2.80 an ounce at $1,243.80. March Comex silver was down $0.045 at $14.595 an ounce.
Look for a more active trading day Thursday, what with the U.S. stock and financial markets closed today for a national day of mourning the late President George H.W. Bush, and following the sharp losses in the U.S. stock market on Tuesday. If the U.S. stock market continues to sell offâ€”especially in volatile price action--gold and silver prices would likely see appreciation on safe-haven demand.
World stock markets were mostly lower overnight, following the big sell off in the U.S. stock indexes Tuesday. The initial trader and investor euphoria over a U.S.-China trade dispute cease-fire for 90 days has rapidly dissipated. U.S. stock indexes did post modest rebounds in overnight trading.
A feature in the marketplace recently that also has the stock market bulls spooked is falling U.S. Treasury yields (rising prices). The five-year T-Note yield is presently below the lower maturities. A fully inverted yield curve has been historically bearish for the U.S. economy and stock market. Right now the 10-year Treasury note yield remains above the 2-year, so the yield curve is not fully inverted.
The key outside markets today find the U.S. dollar index trading near steady. Meantime, Nymex crude oil prices are firmer and trading around $53.50 a barrel. The OPEC oil cartel will meet in Vienna, Austria on Thursday. Reports earlier this week said Russian and Saudi Arabian officials plan to extend production cuts. However, reports today said Saudi Arabia may not have agreed to a cut yet.
Technically, the gold bulls and bears are on a level overall near-term technical playing field. A price uptrend line is in place on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close in February futures above solid technical resistance at the October high of $1,252.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at last weekâ€™s low of $1,216.80. First resistance is seen at this weekâ€™s high of $1,247.50 and then at $1,252.00. First support is seen at todayâ€™s low of $1,238.70 and then at $1,235.00. Wyckoff's Market Rating: 5.0
March silver futures bears have the overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the October high of $15.055 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the November low of $13.985. First resistance is seen at this weekâ€™s high of $14.745 and then at $15.00. Next support is seen at Tuesdayâ€™s low of $14.46 and then at this weekâ€™s low of $14.28. Wyckoff's Market Rating: 3.0.
March N.Y. copper closed up 145 points at 277.35 cents today. Prices closed near the session high today. The copper bears have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the September high of 288.80 cents. The next downside price objective for the bears is closing prices below solid technical support at the November low of 266.20 cents. First resistance is seen at 280.00 cents and then at Tuesdayâ€™s high of 282.30 cents. First support is seen at todayâ€™s low of 274.50 cents and then at 272.50 cents. Wyckoff's Market Rating: 4.0.