Gold, silver see mild safe-haven demand on China worries

(Kitco News, Tues. Nov. 29th, 2022) – Gold and silver prices are moderately higher in midday U.S. trading Tuesday. Some safe-haven demand has surfaced amid the civil unrest in China. The key “outside markets”—the U.S. dollar index and crude oil–are in a bullish posture for gold and silver today as as the USDX is a bit lower and crude oil prices are higher. February gold was last up $10.30 at $1,765.70 and March silver was up $0.35 at $21.475.

Traders and investors are still closely watching the civil unrest situation in China. Some market watchers, including some metals traders, are deeming the recent unrest as bullish for stocks and commodities because it will likely force China to back off on its strict Covid lockdowns that have crimped the world’s second-largest economy.

Reports said new Covid cases in China are decelerating a bit and that vaccinations of the elderly are on the rise. It was also calmer in Chinese streets Tuesday evening, with no major protesting reported in the media. Reports said Chinese authorities deployed a heavy police presence in major cities to deter a repeat of the weekend demonstrations.

Respected authority on China, Bill Bishop of Sinocism, said the government “has a playbook for dealing with these kinds of events and has been hardening the system for many years for just these kinds of threats.” He said the Chinese government will be “pushing harder on propaganda work, censorship and political thought work. And “;hostile foreign forces’ will be blamed.” Bishop added, “For all the stability maintenance work Beijing has done they really would have a hard time dealing with tens or hundreds of thousands or more people on the streets in one or more cities. I am not expecting anything like that to happen, but you can’t rule it out, and I will bet the security services are not ruling it out.”

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Global stock markets were mostly higher overnight. U.S. stock indexes modestly lower at midday.

Other big market events this week include a speech by Federal Reserve Chairman Jerome Powell on Wednesday afternoon and the U.S. employment report from the Labor Department on Friday morning.

The key outside markets today see the U.S. dollar index a bit lower. Nymex crude oil prices are higher on a strong rebound after hitting an 11-month early Monday, and are trading around $78.25 a barrel. There are reports OPEC at its meeting next week will consider cutting the cartel’s collective crude oil production. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently around 3.7%.

Gold Price in US Dollars

Technically, February gold futures bulls have the slight overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the November high of $1,806.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,700.00. First resistance is seen at today’s high of $1,773.40 and then at this week’s high of $1,778.50. First support is seen at today’s low of $1,752.90 and then at $1,740.00.

March silver futures bulls have the overall near-term technical advantage. Prices are in a choppy three-month-old uptrend on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the November high of $22.50. The next downside price objective for the bears is closing prices below solid support at $19.00. First resistance is seen at this week’s high of $21.815 and then at $22.00. Next support is seen at $21.00 and then at last week’s low of $20.79. Wyckoff’s Market Rating: 6.0.

March N.Y. copper closed up 300 points at 364.50 cents today. Prices closed near mid-range today. 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 the November high of 394.70 cents. The next downside price objective for the bears is closing prices below solid technical support at 330.00 cents. First resistance is seen at today’s high of 368.45 cents and then at 375.00 cents. First support is seen at today’s low of 359.55 cents and then at this week’s low of 354.70 cents.

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com