(Kitco News) - Gold prices are modestly up and silver prices slightly down near midday Monday. The precious metals bulls have stabilized prices after recent higher volatility, which is friendly for both markets. The precious metals traders are awaiting a fresh fundamental catalyst to ignite trending price action. December gold was last up $13.20 at $4,010.40. December silver prices were down $0.105 at $48.055.
In overnight news, China is scrapping a long-standing gold tax incentive, which will no longer allow retailers to offset a value-added tax when selling gold. The rule covers both investment products, such as high-purity gold bars and ingots, and non-investment uses including jewelry and industrial materials. The move is expected to bolster government revenue but will also likely increase the cost of buying gold for Chinese consumers.
The key outside markets today see the U.S. dollar index slightly up. Crude oil prices are firmer and trading around $61.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.11%.
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’ next upside price objective is to produce a close above solid resistance at $4,100.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,800.00. First resistance is seen at the overnight high of $4,043.10 and then at Friday’s high of $4,059.90. First support is seen at today’s low of $3,971.30 and then at $3,950.00. Wyckoff's Market Rating: 6.0.
December silver futures bulls' next upside price objective is closing prices above solid technical resistance at $50.00. The next downside price objective for the bears is closing prices below solid support at $45.00. First resistance is seen at $49.00 and then at $49.225. Next support is seen at today’s low of $47.80 and then at $47.00. Wyckoff's Market Rating: 6.0.
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