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Gold down on apparent U.S.-Iran tensions easing; bulls now exhausted

Kitco News

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(Kitco News) - Gold and silver prices are lower and nearer their daily lows in midday U.S. futures trading Wednesday, after both metals spiked higher overnight following an Iranian missile strike near U.S. troops in Iraq. February gold futures hit a nearly seven-year high of $1,613.30 overnight, while silver scored a more-than-three-month high of $18.895. February gold futures were last down $12.70 an ounce at 1,561.70. March Comex silver prices were last down $0.168 at $18.225 an ounce.

Global markets that were open Tuesday evening U.S. time were rocked when Iran launched at least a dozen missiles at military bases in Iraq where U.S. troops were stationed. Iran immediately claimed responsibility for the attacks, which it called “hard revenge” for the U.S. killing of its leading military general last week. There were no U.S. casualties. President Trump tweeted “all is well” and said in a speech Wednesday that Iran is “standing down.” It appears Iran did not want to kill Americans which would then likely see a massive U.S. retaliation. Military analysts believe Iran’s missiles are accurate enough to have inflicted more loss of human life, if that’s what Iran’s leaders wanted.

As the gold market sold off amid Trump’s speech Wednesday, U.S. stock indexes rallied to session highs and the indexes are now back near their record highs and equity bulls again have upside momentum. Crude oil prices sold off on the U.S.-Iran stand-down and following a bearish weekly U.S. stockpiles report. Crude oil prices spiked to a nine-month high of $65.65, basis Nymex crude oil futures, overnight, but are presently trading sharply down, at around $60.00.

In other news Wednesday, the U.S. ADP national employment report for December came in stronger than expected, at up 220,000 jobs versus expectations for a rise of 150,000. The ADP report is a precursor to the more important jobs report from the Labor Department that is due out Friday morning.

Live 24 hours gold chart [Kitco Inc.]

Technically, February gold prices were nearer the session low at midday after spiking to a nearly seven-year high of $1,616.30 overnight. Today’s price action scored a big and bearish “outside day” down on the daily bar chart, including filling an upside price gap on the daily bar chart. Today’s price action produced a bearish buying “exhaustion tail,” whereby the bulls have run out of gas and which suggests a near-term market top is in place. The bulls do still have the firm overall near-term technical advantage amid a seven-week-old price uptrend in place on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,590.90. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,530.00. First resistance is seen at $1,575.00 and then at $1,580.00. First support is seen at today’s low of $1,553.90 and then at 1,550.00. Wyckoff's Market Rating: 7.0

Live 24 hours silver chart [ Kitco Inc. ]

March silver futures prices were nearer the session low at midday today after spiking to a 3.5-month high overnight. Today’s price action hints that the bulls have run out of gas and are exhausted. The silver bulls still have the overall near-term technical advantage amid a four-week-old price uptrend 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 $17.50. First resistance is seen at $18.55 and then at today’s high of $18.895. Next support is seen at $18.00 and then at last week’s low of $17.83. Wyckoff's Market Rating: 6.5.

March N.Y. copper closed up 65 points at 279.95 cents today. Prices closed nearer the session high today. The copper bulls have the overall near-term technical advantage. However, a four-month-old uptrend on the daily bar chart is in jeopardy. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 290.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 270.00 cents. First resistance is seen at today’s high of 281.20 cents and 283.50 cents. First support is seen at last week’s low of 275.95 cents and then at 273.00 cents. Wyckoff's Market Rating: 6.5.

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