Gold, silver prices power higher on safe-haven bids amid coronavirus uncertainty
(Kitco News) - Gold and silver prices are sharply up and hit in midday U.S. futures trading Tuesday, on safe-haven demand as the economic fallout from the coronavirus outbreak is starting to intensify. Gold hit a five-week high and pushed back above the psychologically important $1,600,00 level Tuesday, while silver hit a three-week high and moved back above $18.00. February gold futures were last up $17.30 an ounce at 1,603.80. March Comex silver prices were last up $0.416 at $18.15 an ounce.
Asian and European shares were mostly lower overnight. U.S. stock indexes are lower at midday. 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.
Importantly, among market watchers, analysts, health officials and other prognosticators, there is no consensus at all on where the coronavirus outbreak goes from here, regarding both new cases contracted by the public and the impact on China’s and the rest of the global economy. This high uncertainty is likely to continue to support demand for safe-haven assets like the precious metals.
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.
Technically, April gold futures prices were nearer the session high at midday today. The bulls have the solid overall near-term technical advantage and gained more power today. A three-month-old price uptrend has been restarted on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the January high of $1,619.60. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,565.00. First resistance is seen at today’s high of $1,608.20 and then at $1,619.60. First support is seen at $1,590.00 and then at today’s low of $1,581.80. Wyckoff's Market Rating: 7.5
March silver futures prices were nearer the session high at midday today. The silver bulls have gained the overall near-term technical advantage. A four-week-old price downtrend on the daily bar chart was negated today. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the January high of $18.895 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 today’s high of $18.205 and then at $18.375. Next support is seen at $18.00 and then at today’s low of $17.67. Wyckoff's Market Rating: 6.0.
March N.Y. copper closed up 50 points at 260.45 cents today. Prices closed nearer the session low after hitting a three-week high early on today. The copper bears still have the overall near-term technical advantage. However, recent upside price action suggests a market bottom is in place. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 270.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the February low of 248.75 cents. First resistance is seen at today’s high of 263.25 cents and then at 265.00 cents. First support is seen at 258.00 cents and then at 255.55 cents. Wyckoff's Market Rating: 3.0.