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Gold weaker but up from daily lows amid China virus outbreak fears

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(Kitco News) - Gold prices are just modestly down and well up from their daily lows in midday U.S. futures trading Tuesday. Silver prices are solidly lower and hit a four-week low today. The gold market bulls are taking a breather amid some normal consolidation and backing and filling on the charts. February gold futures were last down $2.70 an ounce at 1,557.50. March Comex silver prices were last down $0.243 at $17.83 an ounce and did hit a four-week low today.

There is keener risk aversion in the marketplace to start the U.S. trading week Tuesday, following the Martin Luther King holiday Monday. China is now battling a coronavirus that has killed at least five with hundreds more afflicted, and is rapidly spreading. The illness, which is apparently easily contracted, is being compared with the SARS virus killed hundreds 17 years ago. Would-be travelers in China and Asia are now likely to at least curtail their activities. If the situation worsens significantly it could impact Asian economies.

There is also focus on the World Economic Forum annual meeting in Davos, Switzerland. President Trump delivered an address to the group Tuesday, mostly touting U.S. economic growth during his administration’s tenure. At the Davos confab, the International Monetary Fund released a report that forecast global economic growth at 3.3% in 2020 and 3.4% in 2021. Those figures compare with world economic growth of 2.9% in 2019. Respected Bridgewater Associates fund manager Ray Dalio said at the Davos confab that gold should be part of an investor’s portfolio due to the uncertainties in the global marketplace that could derail the bull run in equities.

The markets are so far paying very little attention to the impeachment process of President Trump. The U.S. Senate early this week will debate Trump’s trial parameters, with the trial itself likely starting soon afterward.

The key outside markets today see crude oil prices slightly down and trading around $58.50 a barrel. The U.S. dollar index is slightly down early today.

There was no major U.S. economic data released Tuesday.

Live 24 hours gold chart [Kitco Inc.]

Technically, February gold futures today scored a mildly bearish “outside day” down on the daily bar chart. The bulls have the overall near-term technical advantage as a two-plus-month-old price uptrend in still 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 $1,590.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the January low of $1,519.70. First resistance is seen at today’s high of $1,568.80 and then at $1,575.00. First support is seen at $1,550.00 and then at 1,541.00. Wyckoff's Market Rating: 6.5.

Live 24 hours silver chart [ Kitco Inc. ]

March silver futures hit a four-week low today. The silver bulls have lost their slight the overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the January high of $18.895 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 last week’s high of $18.185 and then at $18.25. Next support is seen at today’s low of $17.62 and then at $17.50. Wyckoff's Market Rating: 5.0.

March N.Y. copper closed down 490 points at 279.65 cents today. Prices closed nearer the session low today on heavy profit taking after hitting an eight-month high last week. The copper bulls still have the firm overall near-term technical advantage. A four-month-old uptrend is still in place on the daily bar chart. 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 282.50 cents and 285.00 cents. First support is seen at today’s low of 279.10 cents and then at the January low of 275.95 cents. Wyckoff's Market Rating: 7.0.
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