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Big rebounds for gold, silver but bulls have more work to do

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(Kitco News) - Gold and silver futures prices are sharply up in midday U.S. trading Tuesday. Heavy short covering in the futures market and perceived bargain buying in the cash market are featured today, following recent solid losses that pushed gold to a five-month low and silver to a nine-week low on Monday. However, the bulls have some more heavy lifting to do to begin to suggest that near-term price uptrends can be sustained and that near-term market bottoms are in place. February gold futures were last up $36.00 at $1,817.00 and March Comex silver was last up $1.427 at $24.03 an ounce.

The metals markets may be seeing some support on news the U.S. Congress is working on a big financial stimulus package for Americans. However, such efforts have proven futile the past couple months.

A solid drop in the U.S. dollar index to a 2.5-year low today is also working in favor of the metals market bulls.

Global stock markets were mixed to higher overnight. U.S. stock indexes are higher at midday. There remains little risk aversion in the marketplace on this first day of December, amid global stock market rallies that see the U.S. stock indexes at or near record highs.

One feature in the marketplace recently has been soaring Bitcoin prices, which this week hit a record high near $20,000. Some are proclaiming Bitcoin is the new safe-haven gold. When it comes to Bitcoin’s concept, some say they get it and some say they don’t get it. Only time will tell which camp is correct. Overall markets history does suggest the extreme daily price moves in Bitcoin are indicative of a market that is near a major top. As for gold, reports say the yellow metal has seen three straight weeks of gold-backed ETF outflows.

The other important outside market sees January Nymex crude oil futures prices weaker and trading around $44.75 a barrel. The OPEC oil cartel is meeting this week and will be discussing keeping its present production cuts. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading at 0.85%.

Live 24 hours gold chart [Kitco Inc.]

Technically, February gold futures bears still have the overall near-term technical advantage. Prices are in a fledgling downtrend on the daily chart. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $1,850.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at this week’s low of $1,767.20. First resistance is seen at $1,825.00 and then at $1,850.00. First support is seen at $1,800.00 and then at today’s low of $1,778.40. Wyckoff's Market Rating: 4.5

Live 24 hours silver chart [ Kitco Inc. ]

March silver futures bulls and bears are back on a level overall near-term technical playing field. Silver bulls' next upside price objective is closing prices above solid technical resistance at $25.285 an ounce. The next downside price objective for the bears is closing prices below solid support at the September low of $21.93. First resistance is seen at $24.50 and then at $25.00. Next support is seen at $23.50 and then at $23.00. Wyckoff's Market Rating: 5.0.

March N.Y. copper closed up 525 points at 349.10 cents today. Prices closed nearer the session high and hit a 7.5-yeaer high today. The copper bulls have the strong overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 375.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 325.00 cents. First resistance is seen at today’s high of 352.15 cents and then at 355.00 cents. First support is seen at this week’s low of 341.70 cents and then at 340.00 cents. Wyckoff's Market Rating: 8.5.

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.