Gold bulls bending, but not breaking; need spark

(Kitco News) - Gold and silver prices are slightly lower at midday Wednesday, as the markets are succumbing just a bit to the generally upbeat trader and investor attitudes in the global marketplace as the holidays approach. A rebound in the U.S. dollar index this week is also a negative for the metals markets. Still, the safe-haven metals bulls can argue they are faring not too badly amid the current “risk-on” trading atmosphere. That said, the gold and silver bulls need a fresh dose of uncertainty in the global marketplace. Such will come. February gold futures were last down $2.10 an ounce at 1,478.50. March Comex silver prices were last down $0.032 at $17.04 an ounce.

Asian and European stock indexes were mixed overnight. The U.S. stock indexes are slightly up at midday and close to this week’s record highs. Traders and investors are turning their attention to the upcoming holidays, so trading interest and volumes are likely to wane the next couple weeks.

Risk appetite has receded just a bit at mid-week, following last week’s U.S.-China partial trade agreement. That deal has yet to be signed and there are many skeptics that wonder how China will be able to purchase $40 billion worth of agricultural products, which is about double the previous record-high annual China ag purchases from the U.S.

In overnight news, the Euro zone consumer price index for November was reported down 0.3% from October and up 1.0%, year-on-year, which was in line with trade expectations but still shows worrisomely low inflation in Europe.

The key “outside markets” today see the U.S. dollar index higher. Greenback bulls are still on the defensive, however, after prices hit a 4.5-month low last week. Meantime, Nymex crude oil prices are firmer and trading around $61.00 a barrel after hitting a three-month high Tuesday.

Technically, February gold futures bulls and bears are still on a level overall near-term technical playing field amid recent choppy and sideways trading. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,500.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the November low of $1,453.10. First resistance is seen at this week’s high of $1,484.90 and then at the December high of $1,491.60. First support is seen at today’s low of $1,474.30 and then at 1,470.00. Wyckoff's Market Rating: 5.0.

March silver futures bears have the slight overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $17.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at last week’s high of $17.185 and then at the December high of $17.415. Next support is seen at $16.82 and then at the Decembers low of $16.565. Wyckoff's Market Rating: 4.5.

March N.Y. copper closed down 10 points at 281.25 cents today. Prices closed near the session high today. The copper bulls have the firm overall near-term technical advantage and still have upside momentum. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 295.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 270.00 cents. First resistance is seen at last week’s high of 283.10 cents and then at 285.00 cents. First support is seen at this week’s low of 278.15 cents and then at 275.00 cents. Wyckoff's Market Rating: 6.5.

By Neils Christensen

For Kitco News

 nchristensen@kitco.com