Gold, Silver Weaker As USDX Rebounds
(Kitco News) - Gold and silver prices are modestly lower in early U.S. trading Tuesday. A rebound in the U.S. dollar index this week is a negative for the precious metals markets. However, the bulls can correctly argue gold and silver are seeing normal, and even healthy, downside corrections amid their price uptrends. April gold futures were last down $1.40 an ounce at $1,317.90. March Comex silver was last down $0.041 at $15.84 an ounce.
European and Asian stock markets were mostly firmer in quieter dealings overnight. Chinese markets and some other Asian markets are closed this week for the Lunar New Year holiday, which could make for quieter trading in world markets most of this week. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.
In overnight news, the Euro zone reported downbeat retail sales in December, at off 1.6% from November and up a paltry 0.8%, year-on-year. The monthly decline was the most in eight years. Meantime, the Euro zone January services purchasing managers index (PMI) came in at a better-than-expected 51.2, which was unchanged from December.
President Trump had dinner with Fed Chairman Jerome Powell and Treasury Secretary Steve Mnuchin at the White House Monday evening, to discuss the U.S. economy—the first time Powell and Trump had a face-to-face conversation since Powell became the Fed chair. Trump had considered firing Powell just a few months ago. Then Powell and the Fed shifted their tenor on U.S. monetary policy to a more dovish stance.
The U.S. highlight of the day will be President Trump’s State of the Union speech in the evening. Many market watchers will want to know what the president says about U.S.-China trade relations. The trade talks appear to be progressing ahead of the early-March deadline for a deal being reached.
The other outside market today sees Nymex crude oil prices weaker trading just above $54.00 a barrel. Political turmoil in Venezuela, a crude oil exporter, is a bullish element for the oil market.
U.S. economic reports due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the U.S. services PMI, the IBD/TIPP economic optimism index, the ISM non-manufacturing report on business, and the global services PMI.
Technically, the April gold bulls have the firm overall near-term technical advantage. 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 April futures above solid resistance at $1,350.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,300.00. First resistance is seen at Monday’s high of $1,323.60 and then at last week’s high of $1,331.10. First support is seen at Monday’s low of $1,312.70 and then at $1,306.50. Wyckoff's Market Rating: 7.0
March silver futures bulls have the near-term technical advantage. A 2.5-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 $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.50. First resistance is seen at Monday’s high of $15.935 and then at $16.00. Next support is seen at Monday’s low of $15.685 and then at $15.50. Wyckoff's Market Rating: 6.5.