Gold Prices Power To 5-Mo. High On Safe-Haven Demand, Weak USDX

(Kitco News) - Santa Claus appears to be giving an early present to the gold market bulls, while delivering a lump of coal to the U.S. stock market. Gold prices are solidly higher, near the daily highs and hit a five-week high in early-afternoon U.S. trading Thursday. The yellow metal is supported on safe-haven demand amid another big drop in the U.S. stock market today, as well as worries about a U.S. government shutdown. Silver prices poked to a six-week high today, helped out by the rally in gold. A sell off in the U.S. dollar index today also worked in favor of the metals market bulls. February gold futures were last up $10.90 an ounce at $1,267.20. March Comex silver was up $0.037 at $14.855 an ounce.

European stock markets were mostly lower overnight, following the solid losses in the U.S. stock market Wednesday. Today’s price action in the U.S. stock indexes saw prices drop to new lows for the year. There are no early chart clues the slumping U.S. stock indexes are near market bottoms.

The world marketplace is still reacting to the U.S. FOMC interest rate hike on Wednesday afternoon and the comments from Fed Chairman Jerome Powell that disappointed most traders and investors. They deemed the Fed’s new monetary policy stance as more dovish than before, but not dovish enough to stave off what many now believe is an impending global economic slowdown.

It’s now a toss-up that the U.S. government will shut down Friday, as reports now say the Trump administration and the Congress may not come to an agreement on a continuing resolution to keep the government open. This is not a major issue for the markets, but does add a bit of uncertainty.

The key outside markets today see the U.S. dollar index solidly lower and hitting a four-week low. The greenback is being hit by the more dovish Federal Reserve and easing tensions in the European Union regarding Italy’s finances, which have supported the Euro currency.

Meantime, Nymex crude oil prices are solidly lower and hit another 15-month low of $45.67 a barrel today. There are still no early chart clues the crude oil market is near a bottom, but there is some strong longer-term chart support at the $42 area that may halt the slide.

Traders are awaiting Friday morning’s U.S. GDP report for the third quarter, which is expected to show a rise of 3.5%, year-on-year.

Technically, February gold futures bulls have the overall near-term technical advantage and have momentum on their side. A five-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 $1,236.50. First resistance is seen at today’s high of $1,267.90 and then at $1,275.00. First support is seen at $1,260.00 and then at $1,250.00. Wyckoff's Market Rating: 6.5

March silver futures bears still have the overall near-term technical advantage. However, bulls are working on a four-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 and last week’s high of $14.915 and then at $15.00. Next support is seen at this week’s low of $14.615 and then at $14.50. Wyckoff's Market Rating: 3.5.

March N.Y. copper closed down 235 points at 269.30 cents today. Prices closed nearer the session high today after hitting a three-month low early on today. The copper bears have the solid overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the December high of 280.35 cents. The next downside price objective for the bears is closing prices below solid technical support at the August low of 260.00 cents. First resistance is seen at 272.00 cents and then at this week’s high of 275.95 cents. First support is seen at today’s low of 265.00 cents and then at 262.50 cents. Wyckoff's Market Rating: 2.0.