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Gold prices resilient despite apparent U.S.-China partial trade deal

Kitco News

Editor's Note: 2020 is expected to be another year of significant uncertainty and turmoil. But the question is what asset will emerge the victor when the dust settles from the global trade war, Brexit, recession threats, negative bond yields. It’s a showdown of global proportions, so don’t miss all our exclusive coverage on how these factors could impact your 2020 investment decisions.

(Kitco News) - Gold prices are slightly higher in early U.S. trading Thursday, and are showing surprising resilience in the face of a geopolitical scene that appears to have become more stable late this week. Some downbeat U.S. economic data is working in favor of the precious metals bulls Friday, as is a slumping greenback on the world foreign exchange market. February gold futures were last up $1.30 an ounce at 1,473.50. March Comex silver prices were last up $0.026 at $16.975 an ounce.

U.S. retail sales in November came in up a paltry 0.2% from October, which was a downside miss from expectations for a 0.5% rise.

Asian and European stock indexes were higher overnight. The U.S. stock indexes are pointed toward higher openings and new record highs when the New York day session begins. Risk is back on the table for traders and investors following reports the U.S. and China are very close to a partial trade deal, as was reported at midday Thursday, including a tweet from President Trump that implied a deal was imminent. However, the marketplace is now wondering why there is “radio silence” coming from Chinese officials Friday. Some media outlets in China were saying any deal that is agreed upon must be fair. Reports said the apparent partial trade deal involves China purchasing $50 billion of U.S. goods—mostly agricultural products—in 2020, in exchange for the U.S. not imposing new tariffs on Chinese imports into the U.S., and cutting in half the current tariffs in place.

The general election in the U.K. Thursday saw Prime Minister Boris Johnson and conservative policies score a solid victory. Johnson then proclaimed the U.K. will exit the European Union (Brexit) by the end of January. This has taken the Brexit uncertainty off the table, after such had been lingering for quite some time. U.K. stocks surged on the news, as did the British pound.

One feature in the markets late this week is rising global bond yields, as assets have moved from the safer-haven fixed income sector into stock markets.

The key “outside markets” today see the U.S. dollar solidly lower and hitting a nearly five-month low. Meantime, Nymex crude oil prices are higher and trading around $60.00 a barrel.

U.S. economic data due for release Friday includes retail sales, import and export prices, and manufacturing and trade inventories.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls and bears are on a level overall near-term technical playing field amid choppy and sideways trading recently. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at $1,500.00. Bears' next near-term downside price breakout objective is pushing futures prices below solid technical support at the November low of $1,453.10. First resistance is seen at $1,480.00 and then at this week’s high of $1,491.60. First support is seen at $1,470.00 and then at this week’s low of $1,463.00. Wyckoff's Market Rating: 5.0

Live 24 hours silver chart [ Kitco Inc. ]

March silver futures bears have the overall near-term technical advantage amid a more-than-three-month-old downtrend in place on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $17.415 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 this week’s high of $17.185 and then at the December high of $17.415. Next support is seen at this week’s low of $16.565 and then at $16.50. Wyckoff's Market Rating: 4.5.

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.