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(Kitco News) – Gold costs are once more sharply greater and hit a virtually seven-year excessive of $1,590.90, foundation February Comex gold, in early U.S. futures buying and selling Monday. Meantime, silver futures scored a more-than-three-month excessive of $18.55, foundation March Comex futures. Excessive geopolitical tensions are driving the safe-haven metals north. February gold futures were last up $25.80 an ounce at 1,578.20. March Comex silver prices were last up $0.319 at $18.47 an ounce.
For the very short-term traders of gold (usually futures markets), here’s an important development: History shows that a big spike up in prices amid higher volatility tends to produce near-term market tops sooner rather than later, after that initial spike up. That means in the coming days the gold market could put in a “near-term” top that will last for a moderate period of time. However, for the longer-term investors in gold, it’s important to note that the recent strong price gains are a bullish upside technical “breakout” from recent trading levels, to suggest still more price gains are very likely in the coming weeks and months, or longer.
Global stock markets are still reeling on geopolitical fears following the U.S. drone strike late last week that killed Iran’s leading military figure. Asian and European stocks were down overnight and the U.S. stock indexes are set to open the New York day session with solid losses.
The key “outside markets” today see crude oil prices higher and at a 22-month high, after hitting $64.72 a barrel overnight. Meantime, the U.S. dollar index is weaker amid a five-week-old downtrend in place on the every day bar chart.
The weekend noticed extra saber-rattling from the U.S. and Iran. President Trump tweeted that the U.S. has 52 Iranian websites set for assault if Iran retaliates in opposition to the U.S. for the killing of its common. Meantime, Iraqi’s authorities voted to expel U.S. troops from Iraq, which prompted a response from Trump that the U.S. would impose financial sanctions on Iraq if such occurred. Nations across the globe issued proclamations urging restraint on the matter from each the U.S. and Iran. That is arguably probably the most severe geopolitical improvement in lots of years, and whose repercussions will play out for a very long time to come back. That can possible maintain dealer and investor threat aversion elevated for a while to come back. That’s bullish for safe-haven belongings like valuable metals and U.S. Treasuries.
In different in a single day information, the Euro zone producer worth index for December got here in at up 0.2% on the month and down 1.4%, year-on-year. Very low inflationary pressures on the planet’s main economies continues to be a priority for the main central banks of the world.
U.S. financial information due for launch Monday contains the U.S. providers buying managers’ index (PMI) and the worldwide PMI.
Technically, the gold bulls have the strong general near-term technical benefit and gained extra energy right this moment as an accelerating worth uptrend is in place on the every day chart. Bulls’ subsequent upside worth goal is to supply a detailed in February futures above strong resistance at $1,600.00. Bears’ subsequent near-term draw back worth goal is pushing futures costs under strong technical help at $1,530.00. First resistance is seen at $1,585.00 after which at right this moment’s excessive of $1,590.90. First help is seen at right this moment’s low of $1,562.30 after which at $1,556.50—the underside of right this moment’s upside worth hole on the every day bar chart. Wyckoff’s Market Score: 8.5
March silver futures bulls have the agency general near-term technical benefit as a worth uptrend line is in place on the every day bar chart. Silver bulls’ subsequent upside worth breakout goal is closing costs above strong technical resistance at $19.00 an oz.. The following draw back worth breakout goal for the bears is closing costs under strong help at $17.50. First resistance is seen at right this moment’s excessive of $18.55 after which at $18.75. Subsequent help is seen at right this moment’s low of $18.17 after which at $18.00. Wyckoff’s Market Score: 7.0.
Disclaimer: The views expressed on this article are these of the writer and should not replicate these of Kitco Metals Inc. The writer has made each effort to make sure accuracy of data supplied; nonetheless, neither Kitco Metals Inc. nor the writer can assure such accuracy. This text is strictly for informational functions solely. It’s not a solicitation to make any alternate in commodities, securities or different monetary devices. Kitco Metals Inc. and the writer of this text don’t settle for culpability for losses and/ or damages arising from the usage of this publication.