Slight Price Gains for Gold and Bulls Have Momentum

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Dec 08, 2020 11:25 NY TimeKitco 10AM Silver Fix

(Kitco News, Tues. Dec. 8th, 2020) –  Gold futures prices are modestly up in early U.S. trading Tuesday, on some follow-through strength following solid gains posted Monday. There is some keener risk aversion in the marketplace this week, which is prompting some safe-haven demand and perceived bargain hunting following recent losses in the yellow metal. Very recent price action does suggest near-term market bottoms are in place for gold and silver. February gold futures were last up $2.60 at $1,868.60 and March Comex silver was last down $0.084 at $24.705 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. Key U.S. indexes have hit record highs just recently and are so far just seeing some normal profit taking in price uptrends. Traders and investor enthusiasm is being dented early this week as Covid-19 daily infections, hospitalizations and deaths hit a record on Monday. The marketplace worries the pandemic will again partially shut down U.S. businesses over the winter and cripple economic growth during that period. The downbeat attitudes come as vaccines are rolling out in the U.K. and coming soon in the U.S.

Also what looked to be promising progress on a U.S. government financial aid package for Americans impacted by the pandemic appears to have at least temporarily stalled out in Congress. 

European traders/investors are also anxious regarding the lack of progress between the U.K. and the European union on a smooth Brexit for the U.K. The British pound has slumped this week on this matter.

In overnight news, the Euro zone third-quarter GDP was revised to 12.5% growth from the second quarter—down just a bit from the previous estimate. GDP for the Euro zone was down 4.3% year-on-year.

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 a bit lower and trading around $45.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading at 0.93%. 

U.S. economic data due for release Tuesday includes revised productivity and costs, the weekly Goldman Sachs and Johnson Redbook retail sales reports, and the IBD/TIPP economic optimism index.

Technically, the February gold futures bulls and bears are back on a level overall near-term technical playing field. Bulls have momentum. A four-week-old downtrend line on the daily bar chart has been negated. 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 the November low of $1,767.20. First resistance is seen at the overnight high of $1,876.00 and then at $1,885.00. First support is seen at $1,858.00 and then at $1,850.00.

March silver futures bulls have gained the slight overall near-term technical advantage. 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 this week’s high of $24.94 and then at $25.00. Next support is seen at $24.00 and then at this week’s low of $23.63.

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2093@gmail.com