Gold Sees Modest Price Rebound From Overnight Weakness

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Dec 07, 2020 11:10 NY TimeKitco 10AM Silver Fix

(Kitco News, Mon. Dex. 7th, 2020) –  Gold futures prices are modestly up in early U.S. trading Monday, rebounding from overnight pressure that was due in part to bearish outside markets today that see a bounce in the U.S. dollar index and weaker crude oil prices. There is some keener risk aversion in the marketplace to start the trading week, which is prompting a a “buy-the-dip” move by gold traders, on some safe-haven demand. The U.S. dollar index has also come down from its overnight highs, to also support some buying interest in the precious metals markets. February gold futures were last up $2.00 at $1,842.20 and March Comex silverwas last down $0.228 at $24.03 an ounce. 

Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins after key indexes hit record highs last week. Risk aversion has crept back into the marketplace to start the trading week. The U.S. is reportedly set to slap more economic sanctions on Chinese officials, in response to China’s crackdown on Hong Kong protesters. Markets are also a bit edgy on weekend news the U.K. and the European Union are still far apart on a smooth Brexit plan. Also, the U.S. and other parts of the world continued to be ravaged by Covid-19. Record daily cases and deaths in the U.S. continue to get reported, with California virtually locked down again.

One the bright side it appears U.S. congressional leaders are still moving closer to agreeing on a financial stimulus package for Americans. The package would be just under $1 trillion.

Meantime, China’s economy continues to power ahead as that country last spring clamped down on its population and locked them up, ostensibly defeating the virus in that country. Chinese exports rose 21.1% in November, year-on-year, the biggest rise in nine years. China’s imports were up 4.5% in the same period, but below market expectations.

The  U.S. dollar index is slightly higher early today and seeing a corrective bounce after hitting a 2.5-year low last week. The other important outside market sees January Nymex crude oil futures prices lower and trading around $46.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading at 0.94%. 

U.S. economic data due for release Monday includes the employment trends index and consumer credit.

Technically, the February gold futures bears still have the overall near-term technical advantage. While prices are still in a three-week-old downtrend on the daily bar chart, more price gains Friday would likely negate the price downtrend. Also, gold prices have climbed back above the key 200-day moving average. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at $1,900.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at this week’s low of $1,767.20. First resistance is seen at last week’s high of $1,852.70 and then at $1,875.00. First support is seen at the overnight low of $1,824.80 and then at $1,810.00.

March silver futures bulls and bears are on a level overall near-term technical playing field, but bulls have some momentum on their side. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the November high of $26.27 an ounce. The next downside price objective for the bears is closing prices below solid support at the September low of $21.93. First resistance is seen at the overnight high of $24.365 and then at last week’s high of $24.585. Next support is seen at the overnight low of $23.63 and then at $23.00. 
Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com