Gold price weaker as risk aversion recedes a bit
(Kitco News) - Gold prices are modestly down in early U.S. trading Thursday. Omicron fears have somewhat subsided late this week and that's putting some risk appetite back into the marketplace. A slumping crude oil market this week is also a negative for the metals markets. February gold was last down $6.80 at $1,777.30 and March Comex silver was last up $0.046 at $22.375 an ounce.
Global stock markets were mixed to weaker in overnight trading. The U.S. stock indexes are pointed to mixed to higher openings when the New York day session begins. The U.S. stock indexes overnight recovered some of their late-Wednesday losses that came after news that a case of Omicron was discovered in California. That news was not surprising but still rattled the stock market. Overnight news that the World Health Organization said vaccinations would offer at least some protection against the new strain helped assuage worries on the matter. Also, reports say Omicron is no more severe than the other coronavirus strains and may be milder. However, by no means has the marketplace reached calm on the matter. Don't be surprised to see more markets volatility in the near term as more becomes known about Omicron.
In overnight news, the Euro zone reported its October producer price index at up 5.4% from September and up 21.9%, year-on-year. Those hot numbers were even hotter than the elevated PPI numbers that were forecast.
The Bank of America staff of commodity market analysts has forecast the price of Brent crude oil to possibly reach $120 a barrel by the middle of next year. Prices are trading around $70.00 at present. Meantime, OPEC officials said Wednesday that oil markets face a surplus in the first quarter of next year. If I have learned one thing in being in the commodity markets news and analysis business for nearly 40 years, it's that forecasting future price levels for a commodity is mostly an exercise in futility that sets the prognosticating analysts up for future embarrassment. Still, many of us do it out of being compelled or even required to do so.
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The key "outside markets" see Nymex crude oil prices higher and trading around $66.75 a barrel, after hitting a three-month low of $64.43 on Tuesday. The U.S. dollar index is slightly lower. Meantime, The yield on the U.S. Treasury 10-year note is presently fetching 1.492%.
The marketplace is awaiting the U.S. employment situation report for November from the Labor Department on Friday morning. The key non-farm payrolls figure is expected to come in at up 573,000 compared to a rise of 531,000 in October.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, and the monthly retail chain sales index. Several Federal Reserve officials are also scheduled to speak today.
Technically, February gold futures bulls have the slight overall near-term technical advantage but need to show fresh power soon to keep it. A two-month-old uptrend on the daily bar chart is still alive, but just barely. Bulls' next upside price objective is to produce a close above solid resistance at last week's high of $1,853.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,761.00. First resistance is seen at the overnight high of $1,785.20 and then at Wednesday's high of $1,795.70. First support is seen at today's low of $1,767.80 and then at the November low of $1,761.00. Wyckoff's Market Rating: 5.5
The March silver bears have the firm overall near-term technical advantage. Prices have been trending down for nearly three weeks. Silver bulls' next upside price objective is closing December futures prices above solid technical resistance at $24.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the September low of $21.46. First resistance is seen at $22.70 and then at $23.00. Next support is seen at this week's low of $22.185 and then at $22.00. Wyckoff's Market Rating: 2.5.