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Gold, silver prices weaker, but look for traders to "buy the dip"

Kitco News

(Kitco News) - Gold and silver prices are modestly weaker in early U.S. futures trading Friday. The safe-haven metals are seeing some pressure despite marketplace focus to end the week and the month right back on the coronavirus outbreak that is spreading. Heading into an uncertain weekend, don’t be surprised to see the overnight weakness become a bargain-hunting buying opportunity for the gold and silver bulls. February gold futures were last down $3.20 an ounce at 1,580.30. March Comex silver prices were last down $0.132 at $17.86 an ounce.

This last trading day of the week and of the month finds Asian and European stock markets mostly lower. Mainland China markets remain closed for the Lunar New Year holiday. U.S. stock indexes are pointed toward lower openings when the New York day session begins.

The coronavirus outbreak is back on the front burner of the global market place Friday. Risk aversion is in order on this day as the outbreak has around 10,000 Chinese afflicted and over 210 have died. The World Health Organization is now calling the outbreak an emergency. Add the U.K. to the growing list of countries that have reported the many are calling the “Wuhan virus.” The impact on global economic growth is in question, but nobody has a clear answer at present, as the situation continues to play out.

It’s been an up-and-down trading affair the past week regarding the coronavirus outbreak. One day the marketplace deems the outbreak as overblown and then next day it deems the situation as serious and escalating. The uncertainty of the matter has hit the raw commodity sector hard, led by crude oil prices dropping over $12.00 a barrel from the January high. Safe-haven gold prices have benefitted from the keener anxiety, but it’s also been a choppy trading affair.

In other dour economic news, the European Union collective economy grew a paltry 1.2% in 2019, it was reported Friday, which is the slowest pace in six years. A slumping EU auto sector was partly to blame.

The key outside markets today see crude oil prices modestly up and trading around $52.50 a barrel. Meantime, the U.S. dollar index is slightly weaker. The USDX hit a two-month high earlier this week.

U.S. economic data due for release Friday includes personal income and outlays, the employment cost index, the ISM Chicago business survey and the University of Michigan consumer sentiment survey.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls have the overall near-term technical advantage. A nearly three-month-old 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 January high of $1,613.30. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,550.00. First resistance is seen at Thursday’s high of $1,582.40 and then at this week’s high of $1,588.40. First support is seen at the overnight low of $1,570.00 and then at this week’s low of $1,562.00. Wyckoff's Market Rating: 6.5

Live 24 hours silver chart [ Kitco Inc. ]

March silver futures bulls and bears are on a level overall near-term technical playing field amid this week’s very choppy trading. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at this week’s high of $18.375 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 $18.00 and then at $18.25. Next support is seen at Thursday’s low of $17.52 and then at this week’s low of $17.28. Wyckoff's Market Rating: 5.0.

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.