Surging Greenback Hamstrings Metals Markets
(Kitco News) - Gold and silver prices are again modestly down in early U.S. trading Thursday. The U.S. dollar index has rallied strongly this week and hit a four-week high overnight, which is keeping precious metals markets buyers on the sidelines. April gold futures were last down $1.20 an ounce at $1,313.20. March Comex silver was last down $0.016 at $15.685 an ounce.
The U.S. dollar has appreciated this week following a strong U.S. jobs report issued last Friday, which contrasts with some downbeat economic data coming from other major economies recently. Just last week the USDX hit a three-week low. The other key outside market today sees Nymex crude oil prices weaker trading around $53.50 a barrel.
European and Asian stock markets were mixed but mostly weaker in quieter dealings overnight. Chinese markets and some other Asian markets have been closed this week for the Lunar New Year holiday, which is making for subdued trading in many world markets this week. U.S. stock indexes are pointed toward lower openings when the New York day session begins.
In overnight news, there was more downbeat economic news coming out of the European Union, the world’s third-largest economy. The EU’s European Commission cut its growth forecast for the Euro zone to 1.3% in 2019, which is well down from a 1.9% growth rate forecast in November. The report blamed in part the U.S.-China trade war for the slower growth rate. The report also lowered Euro zone inflation expectations, to 1.4% in 2019 and 1.5% in 2020. And in Germany, industrial output in December was down 0.4% from November when a rise of 0.8% was expected.
The Bank of England is holding its regular monetary policy meeting today, but no change is expected.
U.S. economic reports due for release Thursday includes the weekly jobless claims report, the monthly U.S. chain store sales index, and consumer credit.
Technically, the April gold bulls still have the overall near-term technical advantage. Prices are still 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 the January high of $1,331.10. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,300.00. First resistance is seen at this week’s high of $1,323.60 and then at $1,331.10. First support is seen at the overnight low of $1,306.40 and then at $1,300.00. Wyckoff's Market Rating: 6.5
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 this week’s high of $15.935 and then at $16.00. Next support is seen at $15.50 and then at the January low of $15.195. Wyckoff's Market Rating: 6.0.