Gold, silver sellers scarce heading into uncertain weekend
(Kitco News) - Gold and silver prices are steady to slightly up in tentative early U.S. futures trading Friday. The precious metals bears are likely to be in hibernation on this last trading day of the week and as U.S. market participants head into a three-day weekend, with the President’s Day holiday on Monday. It’s anybody’s guess on what the coronavirus outbreak situation will be like come early next week. February gold futures were last up $0.30 an ounce at 1,579.10. March Comex silver prices were last up $0.056 at $17.67 an ounce.
Asian and European shares were narrowly mixed overnight. U.S. stock indexes are pointed toward modestly higher openings and new record highs when the New York day session begins.
Here is the latest on the coronavirus outbreak: About 65,000 people around the globe have been afflicted with the virus, with China’s total now above 60,000. China’s hardest-hit Hubei province saw cases rise by over 4,800 on Friday. Some global shipping rates have fallen to record lows amid the outbreak, as some ships are being turned away at ports. One report said the Capesize index, which tracks freight rates for the largest carriers of dry bulk commodities, fell into negative territory last week for the first time since its creation over 20 years ago.
The annual London Metals Exchange (LME) Week Asia 2020 seminar has been postponed and the LME Asia Dinner has been cancelled due to the outbreak.
China’s central bank said in a statement Friday the effects of the coronavirus outbreak will only be temporary. The bank encouraged foreign investors to set up businesses in China.
The U.S. government on Thursday charged the big Chinese telecommunications giant Huawei with racketeering. The ramifications of this on U.S.-China relations and/or the U.S.-China trade deal signed in January, if any, are not clear.
The U.S. Treasury sold its 30-year bonds at a record-low yield of 2.061% Thursday, beating the previous record low auction yield of 2.17% set last fall. The lowest yield the 30-year bond has ever reached in daily trading is 1.941%, set last summer.
In other overnight news, the Eurozone fourth-quarter GDP was reported up 0.1% from the third quarter and up 0.9%, year-on-year. Those numbers were very close to market expectations.
The key outside markets today see crude oil prices higher and trading around $52.00 a barrel. Meantime, the U.S. dollar index is slightly up in early U.S. trading and hit a multi-month high overnight.
U.S. economic data due for release Friday includes retail sales, import and export prices, industrial production and capacity utilization, manufacturing and trade inventories and the University of Michigan consumer sentiment survey.
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, but need to show more power. 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 this week’s high of $1,581.70 and then at $1,590.00. First support is seen at Thursday’s low of $1,568.50 and then at this week’s low of $1,564.40. Wyckoff's Market Rating: 6.5
March silver futures bears have the overall near-term technical advantage. A five-week-old downtrend is 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 this week’s high of $17.825 and then at $18.00. Next support is seen at this week’s low of $17.435 and then at the January low of $17.28. Wyckoff's Market Rating: 4.0.