Gold prices spike higher U.S. airstrike kills top Iranian general
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(Kitco News) - Gold prices are sharply higher and hit a four-month high in early U.S. futures trading Friday as the recent geopolitical calm has been shattered by a U.S. military air strike in Baghdad, Iraq that killed a top Iranian general. Silver prices pushed to a two-month high today as safe-haven demand for the precious metals is back in order. February gold futures were last up $20.90 an ounce at 1,548.80. March Comex silver prices were last up $0.179 at $18.225 an ounce.
The Iranian general was killed along with an Iraqi paramilitary leader. The U.S. said Iran was planning to kill Americans in the Middle East. The strike also comes after the major attack on a Saudi oil installation a few months ago, in which the U.S. blamed Iran. Iran has said there will be “harsh” retaliation for the U.S. military action.
Global stock markets plunged on the news and U.S. stocks are set to open the New York day session with strong losses. Other key outside markets today see crude oil prices spiking, hitting a 10-month high and presently trading around $2.25 higher at near $63.40 a barrel. The U.S. dollar index continues its rebound from this week’s multi-month low and is trading moderately up on the day.
The keen uncertainty regarding this situation, including how Iran will respond, is likely to keep the global marketplace on edge for some time to come. That will keep gold and silver prices elevated for at least the near term. China has urged both the U.S. and Iran to use restraint, as China and the U.S. are set to sign a partial trade deal on January 15.
The U.S. military action against Iran overshadows a very busy day for U.S. economic data, including the afternoon release of the FOMC minutes from the last meeting. Traders and investors will glean the FOMC minutes for clues on the future direction and timing of U.S. Federal Reserve monetary policy. Other U.S. economic data due for release today includes the ISM New York report on business, the ISM manufacturing report on business, construction spending, the weekly DOE liquid energy stocks report and domestic auto industry sales.
Technically, the gold bulls have the solid overall near-term technical advantage and gained more power today 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 the September high of $1,571.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,520.00. First resistance is seen at today’s high of $1,554.00 and then at $1,560.00. First support is seen at $1,540.00 and then at the overnight low of $1,530.40. Wyckoff's Market Rating: 7.5.
March silver futures bulls also have the overall near-term technical advantage as a price 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 $19.00 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 today’s high of $18.325 and then at $18.50. Next support is seen at $18.00 and then at this week’s low of $17.83. Wyckoff's Market Rating: 6.5.