Gold, Silver Prices Push Higher Amid Stumbling Stock Mkts.
(Kitco News) - Gold prices are solidly higher and near the daily highs in early-afternoon U.S. trading Thursday, and hit another six-month high today. Meantime, silver prices are scoring modest gains and pushed to a five-month high today. The technically important $1,300.00 level is within striking distance for the gold bulls, which if hit would likely trigger heavy buy stop orders in the futures market. February gold futures were last up $9.30 an ounce at $1,293.30. March Comex silver was up $0.121 at $15.77 an ounce.
The Thursday morning December ADP national employment report came in at up 271,000, which was much higher than the consensus forecast of up 178,000. The December number was the highest growth rate in 2018. U.S. stock indexes rebounded a bit from their solid overnight losses, which in turn prompted the gold and silver markets to back down modestly from their early highs. However, as U.S. stocks fell back lower soon thereafter, gold regained its overnight price advances.
European and Asian stock markets were mostly down today. A surprising warning from Apple about slowing sales, especially in China, helped to sink global stock indexes. The Apple news only added to worries about the major economies of the world seeing significantly slower growth rates in 2019.
Currency markets in Asia were roiled overnight, led by a big jump in the Japanese yen against the U.S. dollar. The British pound and the Canadian dollar slumped against the greenback. Other currencies also experienced higher volatility. Some market watchers blamed the downbeat Apple news, released after the U.S. stock market closed on Wednesday. Others blamed thin, post-holiday trading conditions for the currency gyrations, including Japan’s markets being closed for a holiday.
There are also lingering concerns about the U.S. government shutdown that is well into its second week.
A feature in the marketplace the first couple days of the new trading year is falling U.S. Treasury yields (rising prices). U.S. T-Bond and T-Note futures prices hit new contract highs overnight. In a surprising change of sentiment, the Fed funds futures market now shows a 90% chance the Federal Reserve will stand pat on interest rates in 2019, or even make a cut. Just a couple months ago the Fed funds futures were suggesting the marketplace reckoned by 90% odds that the Fed would raise interest rates in 2019.
The key outside markets today see the U.S. dollar index lower on a corrective pullback from Wednesday’s solid gains. Meantime, Nymex crude oil prices are slightly higher and trading just below $47.00 a barrel.
Traders are awaiting what is arguably the most important U.S. data point of the month: Friday morning’s employment situation report for December from the Labor Department. The key non-farm payrolls number is seen coming in at up 176,000.
Technically, February gold futures bulls have the firm overall near-term technical advantage and have momentum on their side. A seven-week-old price uptrend is in place on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,275.00. First resistance is seen at today’s high of $1,294.30 and then at $1,300.00. First support is seen at today’s low of $1,286.40 and then at this week’s low of $1,279.30. Wyckoff's Market Rating: 6.5
March silver futures prices closed near the session high and hit another five-month high today. The silver bulls have the overall near-term technical advantage and have momentum on their side. A seven-week-old price uptrend is in place on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $16.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.25. First resistance is seen at today’s high of $15.78 and then at $16.00. Next support is seen at today’s low of $15.55 and then at this week’s low of $15.385. Wyckoff's Market Rating: 6.0.
March N.Y. copper closed down 545 points at 256.85 cents today. Prices closed nearer the session low and hit another 2.5-year low today. The copper bears have the solid overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 275.00 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 260.00 cents and then at today’s high of 262.05 cents. First support is seen at today’s low of 254.30 cents and then at 252.00 cents. Wyckoff's Market Rating: 1.0.