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Gold prices firmer, bulls looking to restart price uptrend

Kitco News

(Kitco News) - Gold and silver prices are modestly up in early U.S. futures trading Monday. The gold bulls had a good week last week, as they stabilized the market and are now working on keeping alive a price uptrend on the daily bar chart. The safe-haven metals bulls have proven resilient recently, in the face of rallies in global stock markets. February gold futures were last up $2.60 an ounce at 1,576.00. March Comex silver prices were last up $0.073 at $17.765 an ounce.

Asian and European shares were mostly weaker overnight as traders and investors have put the coronavirus outbreak back to the front burner of the marketplace. There is not a consensus on the ultimate impact of the virus on the global economy, but worries are not receding. U.S. stock indexes are pointed toward steady to weaker openings when the New York day session begins. Trader and investors attitudes are not panicky and wanting to sell their risk assets, but more a case of not wanting to step in to buy them.  

The coronavirus outbreak continues to spread, with over 900 reported dead in China, which surpasses the SARS outbreak that occurred over 15 years ago. The World Health Organization said the coronavirus rate of spread could accelerate. Reports also said some manufacturers in China, especially auto makers, have had to stop their assembly lines due to lack of materials for production. Some analysts are saying the coronavirus outbreak in China will have a more negative impact on the domestic economy than the trade war with the U.S.

In other overnight news, China’s consumer price index was reported for January at up 5.4% year-on-year, which was higher than expected and hit an eight-year high. Food price inflation was reported up 20.6%, year-on-year.

The key outside markets today see crude oil prices weaker and trading around $50.00 a barrel. Meantime, the U.S. dollar index is slightly weaker overnight after hitting a four-month high earlier.

U.S. economic data due for release Monday includes the employment trends index. President Trump’s fiscal 2021 budget is also released today.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls have the overall near-term technical advantage and have stabilized the market. Bulls are working on restarting a nearly three-month-old price uptrend 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 the overnight high of $1,580.20 and then at $1,585.00. First support is seen at the overnight low of $1,571.50 and then at $1,563.50. 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 recent choppy trading. However, a downtrend line is still in place on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $18.00 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 $17.875 and then at $18.00. Next support is seen at last week’s low of $17.465 and then at the January 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.