Gold Up, Silver Pops; Bulls Gain Momentum

(Kitco News) - Gold prices are seeing moderate gains in early-afternoon U.S. trading Wednesday. However, the silver market is posting solid gains and has hit a five-week high. Bulls in both metals have upside technical momentum to suggest more upside is in the offing. There are several factors at work supporting the metals this week. Some mild safe-haven demand amid Brexit turmoil, upbeat news regarding U.S.-China trade talks, and improving technical chart postures are all working to bring buyers into the metals markets. February gold futures were last up $4.90 an ounce at $1,252.10. March Comex silver was up $0.262 at $14.895 an ounce.

Today’s U.S. economic data point of the week, the consumer price index for November, came out at unchanged from October, which was right in line with market expectations. Recent U.S. inflation reports have shown very tame inflation, after data released earlier this year raised some concern regarding rising inflation becoming problematic. The metals markets did not react to the report.

World stock markets were mostly higher overnight as global traders and investors chose to focus on improving prospects for a U.S.-China trade deal, instead of the uncertainty of leadership of the United Kingdom. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Trading in the U.S. stock indexes has been volatile this week, with many stock market experts saying to expect this to be the norm for at least a while.

The present U.S.-China trade negotiations are so far producing tangible results, according to reports coming from both nations. Officials from both sides appear to be upbeat on the progress. The marketplace reckons that if the world’s two largest economies come to terms on trade, the spillover effect would be positive for most world economies. Also, the precious metals are supported on the upbeat trade negotiation reports on ideas of better worldwide demand for the metals due to improved economic conditions if a trade deal is reached.

Brexit turmoil has been kicked up a notch at mid-week, as U.K. Prime Minister Theresa May will face a no-confidence vote from members of Parliament today. May on Monday called off a vote on her Brexit plan, which most reckoned would be defeated anyway. She has quickly lost popularity in the U.K. public eye and among members of Parliament. However, most global markets are not being significantly impacted by the political turmoil in the U.K.

The key outside markets early today find the U.S. dollar index lower on a corrective pullback from recent solid gains that pushed the index to a new for-the-move high Tuesday. Meantime, Nymex crude oil prices are higher on a corrective bounce. 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 $1,245.80 and then at $1,240.00. Wyckoff's Market Rating: 6.0

March silver futures bears still have the overall near-term technical advantage. However, bulls have momentum and 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 $15.00 and then at $15.055. Next support is seen at this week’s low of $14.565 and then at last week’s low of $14.28. Wyckoff's Market Rating: 4.0.

March N.Y. copper closed up 30 points at 277.00 cents today. Prices closed near mid-range 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 this week’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.