Gold Pauses As Bulls Gain Confidence

(Kitco News) - Gold prices are trading near steady in early-afternoon U.S. trading Tuesday. Some mild safe-haven demand has been seen in gold early this week, amid Brexit turmoil, the surprising resignation of India’s central bank head, and the threat of a U.S. government shutdown. The technical chart posture for gold has also turned bullish recently. Meantime, silver prices hit a four-week high today. February gold futures were last off $0.40 an ounce at $1,249.20. March Comex silver was up $0.05 at $14.655 an ounce.

U.S. stock indexes sold off at midday after a very contentious, face-to-face meeting between President Trump and Democratic leaders of the House and Senate, regarding Trump’s desire to build a wall on the border with Mexico. Trump strongly threatened to close down the U.S. government unless he gets his way. Gold prices did not see a major reaction to that news.

World stock markets were mostly higher overnight. The world marketplace was encouraged that a high-level telephone call took place Monday between trade officials of the U.S. and Chinese government. The two sides have until March 1 to reach a trade deal, or the U.S. has threatened to levy more trade penalties against China.

Brexit turmoil and uncertainty regarding when and how the U.K. will depart the European Union still have European stock and financial markets a bit unsettled. Prime minister Theresa May Monday called off Tuesday’s vote on her Brexit plan, which most reckoned would be voted down anyway. The Euro currency and British pound sunk on the news.

In overnight news, Indian stock and financial markets gyrated after India’s central bank chief abruptly quit. The Indian rupee dropped sharply on the news. There was also likely some safe-haven demand for gold coming out of India on the news.

Today’s U.S. November producer price index report showed a rise of 0.1% from October, which was just slightly above market expectations, but still showed inflation in the U.S. is not problematic. Also, inflation in the U.S. has actually declined a bit from the summertime.

The key outside markets today saw the U.S. dollar index firmer after seeing some downside pressure overnight. Meantime, Nymex crude oil prices are modestly up after selling pressure seen Monday. There are still no early technical clues the crude oil market is close to a bottom.

Technically, February gold futures bulls have the overall near-term technical advantage. A four-week-old price uptrend is in place on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the July high of $1,284.10. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,225.00. First resistance is seen at this week’s high of $1,256.60 and then at $1,260.00. First support is seen at this week’s low of $1,242.60 and then at $1,235.00. Wyckoff's Market Rating: 6.0

March silver futures prices closed nearer the session low today and hit a four-week high early on. The silver bears still have the overall near-term technical advantage. However, bulls are working on a three-week-old price uptrend on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the October high of $15.055 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the November low of $13.985. First resistance is seen at today’s high of $14.82 and then at $15.00. Next support is seen at last week’s low of $14.28 and then at $14.115. Wyckoff's Market Rating: 3.0.

March N.Y. copper closed up 510 points at 277.05 cents today. Prices closed nearer the session high 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 September high of 288.80 cents. The next downside price objective for the bears is closing prices below solid technical support at the November low of 266.20 cents. First resistance is seen at today’s high of 278.05 cents and then at 280.00 cents. First support is seen at 274.00 cents and then at last week’s low of 270.80 cents. Wyckoff's Market Rating: 3.5.