(Kitco News) – Gold prices are moderately lower Wednesday on some more profit-taking and weak long liquidation. At mid-week investor risk appetite has up-ticked, which is a negative for the safe-haven yellow metal. A firmer U.S. dollar index today is also limiting buying interest in the precious metals markets. February Comex gold was last down $4.80 at $1,080.50 an ounce. March Comex silver was last up $0.044 at $13.795 an ounce.
There is an increased “risk-on” trader and investor attitude in the marketplace Wednesday following some slightly upbeat trade data coming out of China overnight. China’s exports were up a better-than-expected 2.3% in December, year-on-year, after dropping by 3.7% in November. Those figures were in Chinese yuan terms. In U.S. dollar terms the data was not as positive.
Stock markets in Asia and Europe were mostly higher Wednesday, continuing a rebound that began Tuesday. U.S. stock indexes are pointed toward higher openings when the day sessions begin.
Crude oil prices are higher this morning on short covering and bargain hunting after prices hit a 12-year low and Nymex futures fell below $30.00 a barrel on Tuesday. The extreme bearish attitudes for crude oil suggest prices are near the bottom in this major bear market. Remember that markets are the most very bearish at the very bottom in price. Still, the slumping crude oil market has cast a bearish pall over most raw commodity markets as well as world stock markets.
In other overnight news, Euro zone industrial output in November fell by 0.7% from October but was up 1.1% year-on-year.
An international incident has been avoided as Iran has released 10 U.S. sailors who strayed into Iranian waters and were captured on Tuesday.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the Federal Reserve’s beige book, the weekly DOE liquid energy stocks report, and the monthly Treasury budget statement.
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Wyckoff’s Daily Risk Rating: 2.5 (Trader and investor market risk aversion is less 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, gold bears have the overall near-term technical advantage and have regained downside momentum this week. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,113.10. Bears’ next near-term downside price breakout objective is closing prices below solid technical support at $1,070.00. First resistance is seen at the overnight high of $1,087.80 and then at $1,095.00. First support is seen at $1,075.00 and then at $1,070.00. Wyckoff’s Market Rating: 2.5
Silver bears have the solid overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing December futures prices above solid technical resistance at the December high of $14.64 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the contract low of $13.62. First resistance is at Tuesday’s high of $13.91 and then at this week’s high of $14.075. Next support is seen at this week’s low of $13.73 and then at $13.62. Wyckoff’s Market Rating: 1.5.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff
