Mild price gains for gold as risk aversion upticks

(Kitco News, Fri. Nov. 19th, 2021) – Gold prices are modestly higher in early U.S. trading Friday, as some keener uncertainty has entered the marketplace late this week, to support the safe-haven metal. However, a slumping crude oil market is worrisome to the raw commodity market bulls, including the metals markets, and is limiting the upside in gold and silver. December gold was last up $4.70 at $1,866.10 and December Comex silver was last down $0.06 at $24.83 an ounce.

Global stock markets were mixed in overnight trading. The U.S. stock indexes are pointed to mixed openings when the New York day session begins. Surging Covid cases in the U.S. and Europe are back on the front burner of the marketplace late this week. Austria will go into a nationwide lockdown Monday. Germany is going into a partial lockdown. The rise in Covid cases in major economies has prompted worries about slowing global economic growth, and in turn crude oil prices have dropped sharply recently and are at six-week lows. And then there are inflation worries and the potential for “stagflation”—slowing economic growth and rising inflation. However, all of the above have been offset by very upbeat corporate earnings reports for the third quarter that are keeping the S&P 500 and Nasdaq stock indexes near this week’s record highs.

The Turkish lira is sliding again and hit a record low against the U.S. dollar overnight. Turkey’s central bank lowered its interest rates despite rising inflation.

The key outside markets today see the U.S. dollar index higher and near this week’s 15-month high. Nymex crude oil prices are solidly lower and trading around $77.00 a barrel. Oil prices overnight hit a six-week low as it appears the crude market has put in a near-term top. There is talk the U.S. and China may tap their strategic oil reserves to help ease higher gasoline prices. The 10-year U.S. Treasury note yield is presently fetching 1.555%. For perspective, the German 10-year bund yield is presently at -0.328%.

There is no major U.S. economic data due for release Friday.

Technically, December gold futures bulls have the overall near-term technical advantage. The recent pause is not bearish. A six-week-old uptrend is still in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,900.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at Thursday’s high of $1,873.30 and then at this week’s high of $1,879.50. First support is seen at this week’s low of $1,851.00 and then at $1.839.00.

The silver bulls have the overall near-term technical advantage. Prices are in a six-week-old uptrend on the daily bar chart. Silver bulls’ next upside price objective is closing December futures prices above solid technical resistance at $26.13 an ounce. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at Thursday’s high of $25.23 and then at this week’s high of $25.49. Next support is seen at $24.50 and then at $24.25.

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com