Gold, silver prices gain as coronavirus outbreak escalates

Gold and silver prices are moderately higher in midday U.S. futures trading Thursday. Some risk aversion is back in the marketplace late this week, as the coronavirus outbreak has escalated in China. February gold futures were last up $7.00 an ounce at 1,578.60. March Comex silver prices were last up $0.118 at $17.61 an ounce.

New cases of coronavirus increased markedly Thursday in China's Hubei province. There were over 14,800 new cases were reported Thursday in contrast to around 2,000 new cases reported Wednesday. Reports said there were around 240 new deaths in the region. Chinese health officials also widened their definition used to confirm cases. More than 1,300 people have died from the epidemic and the total number of afflicted in the Hubei province stands at over 48,200. The World Health Organization warned the recent reports about the slowdown in the spread of the virus should be treated with “extreme caution.” “This outbreak could still go in any direction,” the WHO said, regarding the status of the outbreak.

China’s businesses are being seriously impacted. There are reports of impending steel shortages and other supply chain disruptions. Auto sales in China are reported down around 20%. Global crude oil demand in the first quarter of this year is forecast to hit the slowest rate of growth in 10 years amid the coronavirus outbreak, according to the International Energy Agency. The IEA said “there is already a major slowdown in oil consumption and the wider economy in China.”

The ebb and flow of this matter as it relates to the marketplace continues—shifting between the front burner and the back burner of the marketplace on any given trading day.

The key outside markets today see crude oil prices firmer and trading around $51.50 a barrel. Meantime, the U.S. dollar index is slightly up in early U.S. trading and not far below this week’s multi-month high.

Technically, April gold futures bulls have the comfortable overall near-term technical advantage. However, they need to show more power to restart a three-month-old price uptrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the February high of $1,598.50. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,542.80. First resistance is seen at today’s high of $1,581.70 and then at $1,590.00. First support is seen at today’s low of $1,568.50 and then at this week’s low of $1,564.40. Wyckoff's Market Rating: 6.5

March silver futures bears have the overall near-term technical advantage. A four-week-old price downtrend is in place on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $18.00 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 this week’s high of $17.825 and then at $18.00. Next support is seen at this week’s low of $17.435 and then at the January low of $17.28. Wyckoff's Market Rating: 4.0.

March N.Y. copper closed up 150 points at 261.45 cents today. Prices closed nearer the session high and hit a three-week high today. The copper bears still have the overall near-term technical advantage. However, recent upside price action now suggests a market bottom is in place. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 270.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the February low of 248.75 cents. First resistance is seen at today’s high of 262.75 cents and then at 265.00 cents. First support is seen at today’s low of 258.15 cents and then at 255.55 cents. Wyckoff's Market Rating: 3.0.

 

By Jim Wyckoff

For Kitco News

David