Gold Prices Modestly Up In Late U.S. Dealings

(Kitco News) - Gold prices are holding mild gains in early-aftgernoon U.S. trading Monday, in a quieter, choppy and two-sided session. Some safe-haven buying interest was featured as world stock markets started out the trading week lower on some very weak economic data coming out of China. However, U.S. stock indexes significantly pared overnight losses by midday today and were just slightly down, which did prompt the gold market to back down from its daily high. February gold futures were last up $2.30 an ounce at $1,291.80. March Comex silver was last up $0.019 at $15.675 an ounce.

European and Asian stock markets were also lower overnight, as there is keener risk aversion in the market place to start the trading week, following the downbeat economic news coming out of China. China’s exports in December were down a surprising 4.4%, year-on-year. Exports were up 5.4% in November. China’s imports fell 7.6% in the same period. In past months both imports and exports saw double-digit gains. The trade war with the U.S. has really hurt China’s economy, the latest import and export numbers suggest. Such will likely embolden the U.S. is its trade posture against China. Last week the two sides met in Beijing and are scheduled to meet next in the U.S.

There was also dour economic news coming out of the European Union Monday. The Euro zone’s factory output dropped 1.7% in November from October, for the largest monthly drop in three years. The reading was down 3.3%, year-on-year, for the biggest drop in six years.

Brexit is also back in the minds of traders and investors in Europe. Voters in the U.K. on Tuesday are likely to reject Prime Minister May’s latest Brexit plan, putting the entire Brexit situation into serious turmoil. That’s prompting a bit of safe-haven demand from U.K. traders.

The U.S. government partial shutdown is now the longest on record. The matter is not a serious drag on the marketplace, but many markets are lacking normal economic reports to drive their daily price action, which is causing uncertainty and some anxiety amid the dearth of news, which is generally bearish for those impacted markets.

The important outside markets today see the U.S. dollar index slightly lower. The index remains in a near-term price downtrend. Meantime, Nymex crude oil prices are lower and trading just above $51.00 a barrel.

Technically, February gold futures bulls have the overall near-term technical advantage. A two-month-old price uptrend is still in place on the daily bar chart. The recent sideways pause is not bearish. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,260.00. First resistance is seen at today’s high of $1,296.60 and then at the January high of $1,300.40. First support is seen at today’s low of $1,287.70 and then at last week’s low of $1,280.20. Wyckoff's Market Rating: 6.5

March silver prices closed near the session high. The silver bulls have the overall near-term technical advantage. A two-month-old price uptrend is in place on the daily bar chart. A bullish pennant pattern has also formed on the daily chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $16.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.25. First resistance is seen at last week’s high of $15.88 and then at the January high of $15.955. Next support is seen at last week’s low of $15.56 and then at $15.385. Wyckoff's Market Rating: 6.0.

March N.Y. copper closed down 295 points at 263.25 cents today. Prices closed nearer the session low. 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 275.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 250.00 cents. First resistance is seen at today’s high of 266.10 cents and then at last week’s high of 268.65 cents. First support is seen at today’s low of 261.65 cents and then at 260.00 cents. Wyckoff's Market Rating: 2.5.