(Kitco News) – Gold futures prices are solidly down and hit a 5.5-month low in early U.S. trading Monday. Silver dropped to a nine-week low. Traders and investors are exhibiting little risk aversion recently, amid no geopolitical hotspots at present, Covid-19 vaccine hopes and an apparent smoother transition of U.S. presidential duties seen. That’s all bearish for the safe-haven metals. February gold futures were last down $17.50 at $1,770.30 and March Comex silver was last down $0.499 at $22.14 an ounce.
Global stock markets were mixed overnight. U.S. stock indexes are also pointed toward mixed openings when the New York day session begins. There were news reports the past few days that a Covid-19 vaccine will be on the market, to some degree, by the end of this year, which is much sooner than most expected. However, somewhat denting trader and investor enthusiasm on this last trading day of the month are reports the out-going Trump administration will further sanction major Chinese companies in the coming weeks.
Copper prices in Shanghai hit a more-than-eight-year high Monday, while prices in London are at a more-than-four-year high. China’s strong economic recovery continues, with the latest data showing its November manufacturing purchasing managers index (PMI) at 52.1 versus 51.4 in October, and 51.5 expected. The non-manufacturing PMI came in at 56.4 in November compared to 56.2 last month and 56.0 expected. The official manufacturing PMI reading was the highest since September 2017, while the mon-manufacturing PMI was the highest reading since June of 2012. There is speculation a Chinese copper producer which may have sold copper forwards at lower price levels and is now caught in a “short squeeze” situation.
The U.S. dollar index is lower and hit a 2.5-year low early today. The other important outside market sees January Nymex crude oil futures prices weaker and trading around $44.75 a barrel. There is an OPEC meeting that begins Monday and will be closely watched by the marketplace. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading at 0.85%.
U.S. economic data due for release Monday includes the Chicago ISM business survey, pending home sales, and the Texas manufacturing survey.
Technically, the February gold futures bears have the overall near-term technical advantage. Prices are in a steep three-week-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $1,860.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,700.00. First resistance is seen at the overnight high of $1,793.30 and then at $1,800.00. First support is seen at the overnight low of $1,767.20 and then at $1,750.00. Wyckoff’s Market Rating: 4.0
March silver futures bears have the slight overall near-term technical advantage as prices are now trending down. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $24.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the September low of $21.93. First resistance is seen at the overnight high of $22.83 and then at $23.00. Next support is seen at $21.93 and then at $21.50. Wyckoff’s Market Rating: 4.5.
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