Gold pressured by bearish outside markets Monday
Gold prices are lower and silver prices modestly up in midday U.S. trading Monday. Gold is feeling the pressure from bearish daily outside markets that include a firmer U.S. dollar index and a slight up-tick in U.S. Treasury yields. The U.S. stock indexes today hit record highs again, which is also a negative for the safe-haven gold and silver markets. April gold was last down $12.20 at $2,026.40. March silver was last up $0.136 at $22.735.
Asian and European stock markets were mixed in quieter overnight trading. China is celebrating its Lunar New Year holiday this week. Many China markets are closed much of this week for the annual holiday. In China it is the year of the Dragon. Broker SP Angel reports in a morning email dispatch that jewelers in China are reported to have stocked up on dragon-themed gold jewelry, with gold jewelry sales expected to rise 30% this year. “The ‘dragon baby’ rush could drive gold prices to new highs if the nation decided to invest in this direction,” said the broker. “ Government officials are hoping the influence of year of the dragon, which is revered for its power, strength, good luck and wisdom, will encourage couples to raise the birth rate. The last year of the dragon in China saw a 38% rise in new births.”
The key outside markets today see the U.S. dollar index slightly firmer. Nymex crude oil prices are a bit weaker and trading around $76.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching 4.195%.
Traders are awaiting Tuesday’s report on the U.S. consumer price index report for January, seen coming in at up 2.9%, year-on-year, compared to a rise of 3.4% in the December report.
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Technically, April gold futures prices hit a two-week low today. The bulls have lost their slight overall near-term technical advantage. Prices are in a nine-week-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,100.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. First resistance is seen at today’s high of $2,041.80 and then at $2,050.00. First support is seen at the January low of $2,023.30 and then at the December low of $2,007.60. Wyckoff's Market Rating: 5.0.
March silver futures bears have the overall near-term technical advantage. A nine-week-old downtrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $24.00. The next downside price objective for the bears is closing prices below solid support at the October low of $21.17. First resistance is seen at today’s high of $23.15 and then at $23.445. Next
support is seen at today’s low of $22.575 and then at last week’s low of $22.195. Wyckoff's Market Rating: 3.5.
March N.Y. copper closed up 190 points at 370.05 cents today. Prices closed nearer the session high today and saw short covering after hitting a seven-week low Friday. The copper bears have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 390.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the October low of 355.75 cents. First resistance is seen at 376.30 cents and then at 380.00 cents. First support is seen at last week’s low of 365.50 cents and then at 362.60 cents. Wyckoff's Market Rating: 3.0.
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Jim Wyckoff
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