Gold prices down as risk appetite up so far this week
(Kitco News) - Gold prices are solidly lower in early U.S. futures trading Tuesday. The safe-haven metal continues under pressure from a rebound in global stock markets early this week, as well as good gains in the U.S. dollar index. Silver prices are trading near steady after Monday’s solid losses. February gold futures were last down $11.80 an ounce at 1,570.50. March Comex silver prices were last up $0.005 at $17.675 an ounce.
Asian stock markets rebounded overnight after Monday’s sell-off. European stock markets were also higher and U.S. stock indexes are pointed toward sharply higher openings when the New York day session begins. So far this week trader and investor risk appetites are keener and the marketplace appears to be moving beyond the coronavirus outbreak that continues to spread. Latest counts show over 20,000 Chinese citizens afflicted with over 425 dead, with air travel to China being significantly curtailed and global and domestic business there disrupted.
China’s central bank this week has injected large amounts of money into its financial system to help out domestic businesses that are being hurt by the coronavirus outbreak. This move has helped to assuage Asian investors as well as others around the globe.
In other overnight news, the Euro zone producer price index in December was reported unchanged from November and down 0.7%, year-on-year. Those numbers were in line with market expectations.
The markets took in stride the highly anticipated Iowa presidential caucuses that have yet to declare a Democratic winner, due to technological issues with the vote count.
The key outside markets today see crude oil prices firmer and trading around $50.75 a barrel. Meantime, the U.S. dollar index is slightly higher on some follow-through strength after good gains posted Monday.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the ISM New York report on business, the IBD/TIPP economic optimism index, and manufacturers’ shipments and inventories.
Technically, the gold bulls have the overall near-term technical advantage. A nearly three-month-old price uptrend is still in place on the daily chart. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at $1,600.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,550.00. First resistance is seen at $1,580.00 and then at the overnight high of $1,584.50. First support is seen at last week’s low of $1,567.90 and then at $1,560.00. Wyckoff's Market Rating: 6.5
March silver futures bulls and bears are on a level overall near-term technical playing field amid recent choppy trading. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at last 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 Monday’s high of $18.125. Next support is seen at Monday’s low of $17.58 and then at $17.50. Wyckoff's Market Rating: 5.0.