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Gold, silver prices start 2020 with modest gains

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 and silver prices are modestly higher in early U.S. futures trading Thursday. With the new year under way and the charts looking the most positive they’ve been in months; look for some more technical-based buying from speculators in the coming days and weeks, including the big “fund” traders. A weakening U.S. dollar on the world foreign exchange market is also working in favor of the precious metals market bulls. February gold futures were last up $2.50 an ounce at 1,525.60. March Comex silver prices were last up $0.039 at $17.96 an ounce.

Asian and European stock indexes were mostly firmer overnight. The U.S. stock indexes are also pointed toward higher openings and at or near record highs when the New York day session begins, on this first trading day of 2020.

Trader and investor attitudes remain upbeat, due in large part to the world’s two largest economies, the U.S. and China, seeing a major thaw in the more-than-two-year-old trade war that has slowed global economic growth. A partial trade deal is set to be signed on January 15th.

China’s central bank eased its monetary policy on Wednesday by lowering its banks’ reserve requirement ratios, which will put more money into China’s financial system. That news also worked to boost world equity markets.

There was major protesting in Hong Kong to start the new year, with reports saying more than 400 civilians were arrested and police using pepper spray and water cannons. This matter could again become a front-burner issue for the marketplace, especially if mainland China gets more involved in quelling the protesters.

In other news, the Euro zone December manufacturing purchasing managers’ index (PMI) was reported at 46.3, which was better than market expectations and compares to the November reading of 46.9. A number below 50.0 suggests contraction in the sector.

A feature in the marketplace during the holiday season has been many currencies rallying significantly against the U.S. dollar. The U.S. dollar index did rebound overnight from a five-month low hit earlier this week. The other key “outside market” today sees Nymex crude oil prices near steady and trading around $61.00 a barrel.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, the U.S. manufacturing PMI, and the global manufacturing PMI.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls have the overall near-term technical advantage as an accelerating price uptrend is in place on the daily chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at $1,550.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,500.00. First resistance is seen at this week’s high of $1,529.00 and then at $1,532.40. First support is seen at the overnight low of $1,519.70 and then at this week’s low of $1,513.50. Wyckoff's Market Rating: 6.5.

Live 24 hours silver chart [ Kitco Inc. ]

March silver futures bulls also have the overall near-term technical advantage as a fledgling uptrend line is in place on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $18.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.00. First resistance is seen at this week’s high of $18.20 and then at $18.25. Next support is seen at this week’s low of $17.83 and then at $17.50. Wyckoff's Market Rating: 6.5.
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.