Gold punished by big rally in U.S. stock market
Gold punished by big rally in U.S. stock market
Date: 04/02/2020
Jim Wyckoff Tuesday February 04, 2020 12:52
Kitco News
Share this article:
(Kitco News) – Gold prices are sharply down, near session lows, and at a three-week low in midday U.S. futures trading Tuesday. The safe-haven metal is reeling as its competing asset class, equities, are seeing rallies this week, led by strong gains in the U.S. stock market that has its indexes once again back near their recent record highs. Solid gains in the U.S. dollar index this week are also bearish for the metals markets. February gold futures were last down $28.60 an ounce at 1,553.70. March Comex silver prices were last down $0.155 at $17.52 an ounce.
Asian stock markets rebounded overnight after Monday’s sell-off. European stock markets were also higher. So far this week trader and investor risk appetites are keen and the marketplace appears to be moving beyond the coronavirus outbreak that continues to spread. Latest counts show over 20,000 Chinese citizens afflicted with over 425 dead, with air travel to China being significantly curtailed and global and domestic business there disrupted.
Importantly, China’s central bank this week has injected large amounts of money into its financial system to help out domestic businesses that are being hurt by the coronavirus outbreak. This move has helped to assuage Asian investors as well as others around the globe.
The other key outside market today sees crude oil prices firmer and trading around $50.50 a barrel, on a minor upside correction after hitting a 13-month low overnight. The slumping oil market is also a bearish outside force for the metals markets.
Technically, April gold futures bulls still have the slight overall near-term technical advantage but are fading as a three-month-old price uptrend on the daily bar chart has at least temporarily been negated. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,598.50. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,535.00. First resistance is seen at $1,565.00 and then at $1,575.00. First support is seen at $1,550.00 and then at 1,542.80. Wyckoff’s Market Rating: 5.5.
March silver futures bulls and bears are on a level overall near-term technical playing field amid choppy trading conditions. A fledgling downtrend line is in place on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $18.375 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.00. First resistance is seen at today’s high of $17.77 and then at $18.00. Next support is seen at the January low of $17.28 and then at $17.00. Wyckoff’s Market Rating: 5.0.
March N.Y. copper closed up 310 points at 253.75 cents today. Prices closed near mid-range on short covering after hitting a more-than-four-year low Monday. The copper bears still have the solid overall near-term technical advantage amid a steep price downtrend. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at 265.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 240.00 cents. First resistance is seen at today’s high of 257.25 cents and then at 260.00 cents. First support is seen at today’s low of 250.15 cents and then at Monday’s low of 248.75 cents. Wyckoff’s Market Rating: 1.5.
