Gold Sharply Up, at 3.5-Mo. High, on Safe-Haven Demand

February 8, 2016

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(Kitco News) – Gold prices are sharply higher and have scored another 3.5-month high in early U.S. trading Monday. More safe-haven demand is featured as world stock markets are again under selling pressure to start the trading week. Chart-based buying interest is also prevalent as gold prices are presently in a near-term uptrend. April Comex gold was last up $23.40 at $1,180.90 an ounce. March Comex silver was last up $0.232 at $15.005 an ounce.

There is risk aversion in the marketplace Monday as most world stock markets were under selling pressure overnight. Dropping crude oil prices are again being blamed for weakening equities prices. Nymex crude oil prices were trading just below $30.00 a barrel just before the U.S. day session began Monday. The U.S. dollar index and U.S. Treasuries were also seeing safe-haven buying interest Monday. U.S. stock indexes are pointed toward solidly lower openings when the U.S. day session begins Monday.

Some Asian markets, including China’s, were closed Monday for the Lunar New Year holiday.

Traders and investors have mostly digested Friday’s U.S. jobs report. The data showed less-than-expected headline non-farm jobs growth, but there were other elements of the overall employment report that prompted some analysts to predict the Federal Reserve could still raise U.S. interest rates in the coming weeks or few months.

U.S. economic data due for release Monday is light and includes the employment trends index.

(Note: Follow me on Twitter–@jimwyckoff–for breaking market news.)

Wyckoff’s Daily Risk Rating: 3.0 (Trader and investor market risk aversion is a bit elevated today.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 5, with 1 being least risk-averse (most risk-on) and 5 being the most risk-averse (risk-off).

Technically, April gold futures prices are in a seven-week-old uptrend on the daily bar chart and the bulls have the overall near-term technical advantage for the first time in months. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,200.00. Bears’ next near-term downside price breakout objective is closing prices below solid technical support at $1,140.00. First resistance is seen at the overnight high of $1,183.60 and then at $1,190.00. First support is seen at $1,170.00 and then at the overnight low of $1,164.50. Wyckoff’s Market Rating: 6.5

March silver bulls have upside momentum and a three-week-old uptrend is in place on the daily bar chart. Prices Friday hit a three-month high. Silver bulls’ next upside price breakout objective is closing December futures prices above solid technical resistance at $15.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.40. First resistance is at last week’s high of $15.065 and then at $15.25. Next support is seen at $14.80 and then at $14.585. Wyckoff’s Market Rating: 5.5.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff

Category: Gold