Gold Hovers Around $1,300; Bulls Have Momentum
(Kitco News) - Gold and silver prices are modestly up in early U.S. trading Monday and bulls in both metals have upside momentum on their side. Gold prices hit a seven-month high of $1,303.70 in February Comex futures overnight. Both gold and silver closed at technically bullish weekly high closes last Friday, which suggests follow-through buying interest early this week. February gold futures were last up $1.50 an ounce at $1,299.60. March Comex silver was up $0.011 at $15.71 an ounce.
European and Asian stock markets were mostly weaker overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. There is some risk aversion in the marketplace to start the trading week, which is also benefitting the safe-haven gold and silver markets.
The U.S. government is open after being partially shut down for a month. However, the government could shut down again in mid-February if President Trump and the Democrats can’t reach a deal on the U.S. budget. Traders and investors are glad to be able to scrutinize some more fresh U.S. economic data to help the drive markets prices.
The U.S.-China trade war that has been playing out for months this week finds high-level officials from both countries meeting in Washington, D.C. There is no consensus on any progress that may or may not be made at this week’s talks. Comments from U.S. and Chinese officials have been all over the map recently.
The political situation in Venezuela is very fluid at present, with the potential for civil violence. The country is a major oil producer.
This week finds the Federal Reserve’s Open Market Committee (FOMC) meeting on Tuesday and Wednesday, with a statement on monetary policy on Wednesday afternoon. Markets could become active and volatile following the results of the meeting.
The U.K. parliament votes on the “Plan B” Brexit initiative from Prime Minister Theresa May on Tuesday.
U.S. economic reports due for release Monday includes the Chicago Fed national activity index and the Texas manufacturing outlook survey.
Technically, the gold bulls have the overall near-term technical advantage and have gained power. Prices are in a 2.5-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 $1,330.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at last week’s low of $1,275.30. First resistance is seen at today’s high of $1,303.70 and then at $1,310.00. First support is seen at $1,290.00 and then at $1,285.00. Wyckoff's Market Rating: 6.5
March silver futures bulls have regained the near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the January high of $15.955 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 the overnight high of $15.83 and then at $15.955. Next support is seen at $15.50 and then at $15.30. Wyckoff's Market Rating: 6.0.