(Kitco News) - Gold and silver prices are posting very sharp gains in midday trading Monday, on corrective bounces after strong selling pressure on Friday that did, at least temporarily, produce some near-term technical damage. Would-be bargain hunters were featured today as they stepped in to buy Friday’s big dips. However, daily price volatility in gold and silver markets has turned extreme. This is not bullish and suggests, at most, a climaxing phase of the major bull market runs. And, at least, it suggests an unknown time period of choppy, highly volatile trading that could drive away both speculative bulls and bears in the futures markets, for fear of them getting whipsawed. December gold was last up $150.00 at $4,363.90. December silver prices were up $1.316 at $51.40.
Trader and investor sentiment improved early Monday as President Trump sought to ease trade tensions with China after markets were rattled early Friday by U.S. bank-credit woes. However, the safe-haven gold and silver bulls were apparently undeterred by today’s better risk appetite in the marketplace.
Day 20 of the U.S. government shutdown and the resulting lack of U.S. economic data, is bullish for the gold and silver markets, due to the uncertainty of the situation.
Global stock markets were mostly firmer overnight. U.S. stock indexes are higher at midday.
The key outside markets today see the U.S. dollar index slightly firmer. Crude oil prices are down a bit and trading around $57.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.02%.
Note: The gold market operates through two primary pricing mechanisms. The first is the spot market, which quotes prices for on-the-spot purchase and immediate delivery. The second is the futures market, which sets prices for delivery at a future date. Due to year-end positioning market liquidity, the December gold futures contract is currently the most actively traded on the CME.
Technically, December gold futures bulls have the overall near-term technical advantage. However, a bearish “key reversal” down occurred Friday, which is one chart clue that a market top is in place. A move to a new record high would negate that bearish technical development.
Bulls’ next upside price objective is to produce a close above solid resistance at the contract/record high of $4,392.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $4,000.00. First resistance is seen at $4,392.00 and then at $4,400.00. First support is seen at $4,300.00 and then at the overnight low of $4,229.70. Wyckoff's Market Rating: 8.0.
The silver bulls have the overall near-term technical advantage. However, a bearish “key reversal” down occurred Friday, which is one chart clue that a market top is in place. Silver bulls' next upside price objective is closing prices above solid technical resistance at the contract/record high of $53.765. The next downside price objective for the bears is closing prices below solid support at $46.70. First resistance is seen at $52.00 and then at $52.50. Next support is seen at $50.50 and then at $50.00. Wyckoff's Market Rating: 8.0.
(Hey! My “Markets Front Burner” weekly email report is my best writing and analysis, I think, because I get to look ahead at the marketplace and do some market price forecasting. Plus, Gold prices are sharply up in early U.S. trading Monday and hit another record high. Silver prices are also up and notched another 14-year high. The powerful but mature bull market runs in gold and silver are accelerating. That’s one early clue that from a time perspective, major market tops could come sooner rather than later. However, from a price perspective, there still could be much more room on the upside for gold and silver prices during this acceleration phase of the mature bull markets, before they peter out for a while. December gold was last up $40.80 at $3,815.90. December silver prices were up $0.361 at $44.575.
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