Gold, silver markets down as risk appetite returns at mid-week

Gold, silver markets down as risk appetite returns at mid-week

Date: 04/12/2019

Jim Wyckoff Wednesday December 04, 2019 12:57
Kitco News

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(Kitco News) – Gold and silver prices are down in midday U.S. trading Wednesday, after gold notched a four-week high in the early going. A rally in the U.S. stock market today prompted some selling pressure in the safe-haven metals. The good news for the gold and silver bulls this week is that both markets have seen their near-term price downtrends eliminated, at least temporarily. February gold futures were last down $4.50 an ounce at 1,479.90. March Comex silver prices were last down $0.308 at $16.94 an ounce.

Risk appetite returned to the marketplace at mid-week on fresh news reports the U.S. and China are close to a trade deal. Amid a lack of other major news developments trader and investor focus remains on the rhetoric coming from the U.S. and China regarding their trade negotiations. For whatever reason, the marketplace at mid-week is more upbeat than Tuesday, on the chances for a trade agreement soon between the world’s two largest economies. It’s hard to imagine the two sides reaching a substantive trade deal soon, given comments coming from both sides. And the U.S. House of Representatives passed a bill late Tuesday requiring U.S. punishment of Chinese officials involved in the repression of Uighur Muslims in the country. China quickly vowed retaliation.

This morning’s ADP national employment report for November came in at up just 67,000 jobs, which is a big miss to the downside from market expectations for a rise of 150,000. The gold market briefly erased modest overnight losses on the news. The U.S. economic data point of the week is Friday’s employment situation report from the Labor Department. The key non-farm payroll number is expected to come in at up around 185,000 jobs.

The key “outside markets” today see the U.S. dollar index weaker again today and hitting a four-week low. The greenback bulls have faded recently. Meantime, Nymex crude oil prices are sharply higher and trading around $58.50 a barrel.

Technically, February gold bulls and bears are on a level overall near-term technical playing field. A three-month-old downtrend on the daily bar chart has this week been at least temporarily negated. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,500.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at the November low of $1,453.10. First resistance is seen at today’s high of $1,489.90 and then at $1,500.00. First support is seen at $1,475.00 and then at Tuesday’s low of $1,465.40. Wyckoff’s Market Rating: 5.0.

March silver futures prices scored a bearish “outside day” down on the daily bar chart today. The silver bears have the slight overall near-term technical advantage. However, a price downtrend on the daily chart has this week been negated. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $17.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.50. First resistance is seen at $17.25 and then at today’s high of $17.415. Next support is seen at the November low of $16.76 and then at $16.50. Wyckoff’s Market Rating: 4.5.

March N.Y. copper closed up 350 points at 265.80 cents today. Prices closed nearer the session high on a corrective bounce from recent selling pressure. The copper bulls and bears are back on a level overall near-term technical playing field. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at last week’s high of 271.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the October low of 252.60 cents. First resistance is seen at today’s high of 266.65 cents and then at this week’s high of 267.90 cents. First support is seen at today’s low of 262.05 cents and then at 260.00. Wyckoff’s Market Rating: 5.0.

By Jim Wyckoff