Gold Prices Rally On Safe-Haven Demand After New North Korea Threats

(Kitco News) - Gold prices were ending the U.S. day session solidly higher and moved back well above the key $1,300.00 level Monday. More safe-haven demand was featured after news reports surfaced at late-morning that a North Korean government official said weekend comments from U.S. President Donald Trump about his country are a declaration of war against the his country. December Comex gold was last up $14.40 an ounce at $1,311.90. December Comex silver prices were last up $0.171 at $17.555 an ounce.

North Korea's foreign minister said in New York Monday that President Trump has declared war on his country and that North Korea has the right to shoot down American war planes. “Since the U.S. declared war on our country, we will have every right to make countermeasures, including the right to shoot down the U.S. bombers even when they are not yet inside the airspace border of our country,” Foreign Minister Ri Yong Ho said to reporters in New York, according to news reports. Short covering in the futures markets was also featured in gold and silver markets Monday, especially from the shorter-term traders. Bargain hunting was also seen in gold and silver cash markets.

Over the weekend there were more verbal barbs traded between Trump and North Korea’s Kim Jong Un. However, the marketplace early Monday morning did not perceive the U.S.-North Korea conflict as having escalated from last week. However, the late-morning news reports from New York regarding North Korea’s latest rhetoric did move markets. While the gold market rallied, U.S. Treasuries also moved to their session highs, the U.S. dollar index also hit new daily highs and was sharply higher, and the U.S. stock market sold off.

The German elections held over the weekend saw Chancellor Angela Merkel secure a fourth term. However, voters did make a shift to the right, which could make it more difficult for Merkel to form a coalition. The elections helped to pressure the Euro currency, which also in turn helped boost the U.S. dollar index.

Another focus this week is on central bankers speeches. European Central Bank President Mario Draghi speaks Monday and Federal Reserve Chair Janet Yellen delivers a speech Tuesday. Other Federal Reserve officials will also give speeches throughout the week.

Technically, December gold futures prices closed nearer the session high and scored a bullish “outside day” up on the daily bar chart today. The gold bulls have regained the slight overall near-term technical advantage. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,340.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,280.00. First resistance is seen at $1,320.00 and then at $1,325.00. First support is seen at $1,300.00 and then at last week’s low of $1,291.20. Wyckoff's Market Rating: 5.5

December silver futures prices closed nearer the session high and scored a bullish “outside day” up on the daily bar chart. The silver bulls have regained the slight overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the September high of $18.29 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.50. First resistance is seen at $17.225 and then at $17.445. Next support is seen at last week’s low of $16.865 and then at $16.80. Wyckoff's Market Rating: 5.5.

December N.Y. copper closed down 80 points at 293.65 cents today. Prices closed nearer the session low today. The copper bulls still have the slight overall near-term technical advantage, but have faded recently to suggest a near-term market top is in place. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the September high of 317.85 cents. The next downside price objective for the bears is closing prices below solid technical support at 280.00 cents. First resistance is seen at today’s high of 296.05 cents and then at last week’s high of 299.30 cents. First support is seen at today’s low of 292.45 cents and then at last week’s low of 289.40 cents. Wyckoff's Market Rating: 5.5.