(Kitco News) - Gold futures prices are moderately lower and silver futures are solidly higher but well down from the daily high in midday U.S. trading Thursday. A strong rebound in the U.S. stock market today after Wednesday’s solid losses has dented bullish enthusiasm for the precious metals, after gold and silver prices rallied in morning dealings. February gold futures were last down $8.00 at $1,836.90 and March Comex silver was last up $0.626 at $26.015 an ounce.
It appears there was some safe-haven demand surface in the precious metals in morning dealings, amid the increasing talk and speculation regarding what could happen to short sellers in the U.S. stock market. Hedge fund managers that short-sell stocks are spooked and could be buying gold and silver as a hedge against impending losses in their short-stock trades. The GameStock/Reddit ordeal playing out in the U.S. stock market appears to have pitted the little guys against the big hedge fund managers, and the little guys won this time. However, there may now be much bigger implications. Said one broker in a morning email dispatch: “Ironically, the GameStop saga may have marked the top of the U.S. tech market despite its shares continuing to climb. Robinhood traders are said to have bought up GameStop shares exposing hedge fund short sellers to multi-billion-dollar losses. While the activity of a small, distressed gaming retailer in the U.S. should not have a significant impact on the rest of the world, there we believe the situation is causing hedge funds and their funders to go ‘risk-off’ and deleverage their investments causing funds to liquidate positions across the board.”
This matter may continue to support the safe-haven gold and silver markets in the near term, as some fund managers are still very queasy. It also could be that silver’s bigger rally than gold on Thursday is partly due to traders/investors or even fund managers viewing that market as a cheaper way to play any keener risk aversion.
In other news, the World Gold Council has reported global demand for gold fell to its lowest level in 13 years during the fourth quarter of 2020. Jewelry buying remained overall weaker due to the pandemic. However, the WGC did say gold demand was bouncing back late last year.
The key “outside markets” today see the U.S. dollar index lower. Meantime, Nymex crude oil futures prices are lower and trading around $52.30 a barrel.
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2924175530478188)
Technically, February gold futures gold bulls and bears are on a level overall near-term technical playing field amid recent choppy trading, including more today. Bulls’ next upside price objective is to produce a close above solid resistance at $1,900.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the January low of $1,800.80. First resistance is seen at today’s high of $1,862.90 and then at last week’s high of $1,874.60. First support is seen at this week’s low of $1,828.40 and then at $1,817.10. Wyckoff's Market Rating: 5.0.
![Live 24 hours silver chart [ Kitco Inc. ]](https://www.kitco.com/commentaries/2020-02-07/images/goldkitcofeb7th.png)
March silver futures bulls have gained the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the January high of $29.105 an ounce. The next downside price objective for the bears is closing prices below solid support at the January low of $24.04. First resistance is seen at $26.50 and then at today’s high of $27.10. Next support is seen at $25.50 and then at $25.00. Wyckoff's Market Rating: 6.0.
March N.Y. copper closed up 165 points at 357.40 cents today. Prices closed nearer the session high today and hit a five-week low. The copper bulls have the firm overall near-term technical advantage but have faded. A price uptrend on the daily bar chart has been negated recently. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the January high of 373.40 cents. The next downside price objective for the bears is closing prices below solid technical support at 340.00 cents. First resistance is seen at 360.00 cents and then at this week’s high of 364.15 cents. First support is seen at Wednesday’s low of 352.05 cents and then at today’s low of 349.10 cents. Wyckoff's Market Rating: 7.0.
