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Gold price down despite uptick in risk aversion

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(Kitco News) - Gold and silver futures prices are lower in early U.S. trading Thursday, despite a bit keener risk aversion seen in the marketplace late this week, evidenced by lower U.S. stock indexes. Such continues a recent phenomena of gold prices tracking the stock indexes when they sell off. A higher U.S. dollar index today is also working against the precious metals market bulls. December gold futures were last down $12.60 at $1,861.30 and December Comex silver was last down $0.418 at $24.03 an ounce.

Global stock markets were mixed to mostly lower overnight. U.S. stock indexes are pointed toward modestly lower openings when the New York day session begins. Increasing restrictions on businesses and the public in the U.S. and Europe, to fight off the out-of-control Covid-19 pandemic, are starting to bite global equity markets, after they had been looking past the matter because of the upbeat vaccine news recently. Hope has been clashing with fear in the marketplace, and on this day it appears fear is winning the battle. New U.S. Covid infections topped 170,000 Wednesday and the U.S. death toll has moved above a quarter-million citizens.

News reports said Goldman Sachs is forecasting bull markets in raw commodities as a hedge against impending inflation. Goldman forecast a return of around 27% over the next 12-months on the Goldman Sachs Commodity Index (GSCI) index, with a 19% return for precious metals, 40% for energy, 3% for industrial metals and a -1% return on agriculture. The grain futures markets are already in a major bull run. Goldman reportedly kept its target of $2,300 an ounce for gold and $30 an ounce for silver.

The U.S. dollar index is higher early today on a corrective bounce from selling pressure earlier this week. Many analysts are predicting further depreciation in the coming months for the greenback on the foreign exchange market. The other important outside market sees January Nymex crude oil futures prices lower and trading around $41.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading at 0.85%.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, existing home sales, leading economic indicators, and the Kansas City Fed manufacturing survey.

Live 24 hours gold chart [Kitco Inc.]

Technically, the December gold futures bulls still have the overall near-term technical advantage but trading has been choppy. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at the November high of $1,966.10. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,848.00. First resistance is seen at the overnight high of $1,872.60 and then at Wednesday’s high of $1,884.20. First support is seen at the overnight low of $1,853.00 and then at $1,848.00. Wyckoff's Market Rating: 6.5

Live 24 hours silver chart [ Kitco Inc. ]

December silver futures bulls have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $27.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the October low of $22.625. First resistance is seen at the overnight high of $24.425 and then Wednesday’s high of $24.78. Next support is seen at the overnight low of $23.785 and then at $23.50. Wyckoff's Market Rating: 6.0.

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.