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Gold, silver prices pressured on surprise China trade overture

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(Kitco News) -  Gold and silver prices are lower in early U.S. trading Monday. The safe-haven metals are seeing selling interest amid an uptick in risk appetite to start the trading week. December gold futures were last down $7.40 an ounce at 1,456.10. December Comex silver prices were last down $0.14 at $16.86 an ounce.

Trader and investor risk appetite is more upbeat to start the trading week on the surprising news that China says it will step up its efforts to protect intellectual property rights. That is a key element the U.S. wants China to reform in order to reach a trade deal. It could be that the U.S.’s hard-line approach on the trade deal with China is putting pressure on China to get a deal completed soon.

Asian and European stock markets were mostly firmer overnight and the U.S. stock indexes are pointed toward higher openings when the New York day session begins.

In other overnight news, Goldman Sachs issued a report that said raw commodity prices will rise in 2020 and for the next decade due to a worldwide move to “decarbonize” the planet, including less investment in carbon-based industries. That scenario would lead to supply shortages of some key commodities, the report said.

Reuters has reported gold worth billions of dollars is being smuggled out of Africa via the United Arab Emirates. The report said the UAE imported just over $15 billion in gold from Africa in 2016. Reuters compared total imports from the UAE with the exports declared by African states which showed that gold was entering the UAE through unknown sources. Furthermore, industrial mining firms in Africa told Reuters they did not send their gold to the UAE. From 2006 to 2016, African gold in UAE’s gold imports increased from 18% to 50%, despite no big industrial firm saying they send their gold there.

The key “outside markets” today see the U.S. dollar index slightly higher. Nymex crude oil prices are near steady and trading around $57.75 a barrel.

U.S. economic data due for release Monday includes the Chicago Fed national activity index and the Texas manufacturing outlook survey.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bears have the overall near-term technical advantage. Prices are in a 2.5-month-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $1,500.00. Bears' next near-term downside price breakout objective is pushing December futures prices below solid technical support at $1,400.00. First resistance is seen at the overnight high of $1,462.00 and then at $1,475.00. First support is seen at the overnight low of $1,454.60 and then at $1,450.00. Wyckoff's Market Rating: 4.0

Live 24 hours silver chart [ Kitco Inc. ]

December silver futures bears also have the overall near-term technical advantage. Prices are in a 2.5-month-old downtrend on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at $17.00 and then at last week’s high of $17.21. Next support is seen at $16.705 and then at the November low of $16.615. Wyckoff's Market Rating: 4.0.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.