Gold Slightly Down Amid Less Risk Aversion In Marketplace
(Kitco News) - Gold prices are mildly lower in early U.S. trading Tuesday, as higher world stock markets have traders and investors in upbeat moods. A firmer U.S. dollar index today is also working against the precious metals market bulls. February gold futures were last down $1.70 an ounce at $1,289.70. March Comex silver was down $0.061 at $15.625 an ounce.
European and Asian stock markets were mostly firmer overnight. U.S. stock indexes are pointed to just slightly higher openings when the New York day session begins.
The global equities markets were boosted overnight in part on news China’s central bank said it will act to stimulate the world’s second-largest economy via tax cuts, more credit availability to smaller companies and infrastructure spending. This news follows some very weak import and export data reported by China on Monday.
However, weak economic numbers coming from Germany, the work horse of the European Union, did dampen enthusiasm among traders and investors in Europe. Germany’s gross domestic product in 2018 was today reported up 1.5% versus up 2.2% in 2017. The 2018 GDP reading was the lowest in five years. China is Germany’s biggest trading partner.
U.S. stock indexes backed down from their overnight highs when JP Morgan early this morning announced disappointing earnings results.
Brexit is back on the front burner of the marketplace this week. Voters in the U.K. later today are likely to reject Prime Minister Theresa May’s latest Brexit plan, which could put the entire Brexit situation into serious turmoil. Such would likely prompt Europeans to seek out safe-haven assets such as gold.
The U.S. government partial shutdown is the longest on record. The matter is not a serious drag on the marketplace, but many markets are lacking normal economic reports to drive their daily price action, which is causing uncertainty and some anxiety amid the dearth of news, which is generally bearish for those impacted markets.
The important outside markets today see the U.S. dollar index higher. The index remains in a near-term price downtrend. Meantime, Nymex crude oil prices are higher and trading just above $51.00 a barrel.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the producer price index, the Empire State manufacturing survey, and the IDB/TIPP economic optimism index. There are also several Federal Reserve officials slated to give speeches today.
Technically, the gold bulls have the overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at $1,300.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,260.00. First resistance is seen at Monday’s high of $1,296.60 and then at the January high of $1,300.40. First support is seen at the overnight low of $1,286.50 and then at last week’s low of $1,280.20. Wyckoff's Market Rating: 6.5
March silver futures bulls have the overall near-term technical advantage. A two-month-old 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 $15.00. First resistance is seen at last week’s high of $15.88 and then at the January high of $15.955. Next support is seen at last week’s low of $15.56 and then at $15.385. Wyckoff's Market Rating: 6.0.