Gold, silver prices gain amid economic impact of coronavirus
(Kitco News) - Gold and silver prices are up and hit two-week highs in early U.S. futures trading Tuesday, on safe-haven demand as the economic fallout from the coronavirus outbreak is starting to intensify. February gold futures were last up $5.50 an ounce at 1,591.90. March Comex silver prices were last up $0.181 at $17.915 an ounce.
Asian and European shares were mostly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. Risk aversion is keener in the marketplace on this first trading day of the week for U.S. traders and investors, following the President’s Day holiday Monday.
The global marketplace is downbeat following news that Apple has issued a warning saying its first-quarter sales will be lower than initially expected due to the Coronavirus outbreak that has slowed or halted the delivery of Apple’s needed supplies coming from China. The rate of daily spread of the illness has slowed to the lowest since January, reports said. Over 1,800 people have died in China from the illness. The global supply chain has been significantly impacted, as seen by the Apple sales-miss news. Reports also said over 730 million in China are still effectively quarantined, suggesting supply-chain disruptions will continue as the world’s second-largest economy is presently crippled.
In other overnight news, the closely watched German ZEW economic expectations index dropped sharply in February, to 8.7 versus 26.7 in January. The coronavirus was blamed for most of the big decline in February.
The key outside markets today see crude oil prices lower and trading around $51.25 a barrel. Meantime, the U.S. dollar index is slightly up and hit another multi-month high in early U.S. trading.
U.S. economic data due for release Tuesday includes the Empire State manufacturing survey, the NAHB housing market index and Treasury international capital data.
Technically, the gold bulls have the firm overall near-term technical advantage and are restarting a 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 the January high of $1,619.60. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,565.00. First resistance is seen at the overnight high of $1,592.40 and then at the January high of $1,598.50. First support is seen at the overnight low of $1,581.80 and then at $1,575.00. Wyckoff's Market Rating: 6.5
March silver futures bears have the slight overall near-term technical advantage. A six-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 $18.375 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the January low of $17.28. First resistance is seen at $18.00 and then at $18.15. Next support is seen at the overnight low of $17.67 and then at last week’s low of $17.435. Wyckoff's Market Rating: 4.5.