Gold & Silver Gain As Geopolitical Worries Resurface

(October 14, 2019 - Jim Wyckoff | Kitco News)

Gold and silver prices are moderately higher in midday U.S. trading Monday, on some safe-haven demand as trader and investor risk aversion is a bit keener to start the trading week. December gold futures were last up $7.10 an ounce at 1,495.80. December Comex silver prices were last up $0.116 at $17.66 an ounce.

The shine of last Friday afternoon’s U.S.-China “Phase 1” trade agreement has quickly worn off. After having the weekend to ponder the matter traders and investors now reckon the agreement is fraught with potholes that are likely derail it. There are now reports China wants more talks before even signing the Phase 1 agreement. “The devil is in the details,” as the saying goes.

Also, the optimism expressed late last week regarding a U.K.-European Union agreement on Brexit has dimmed.

There was more dour economic news coming out of China to start the trading week. China’s exports to the U.S. dropped 22% in September, year-on-year. China’s total exports fell 3.2% in the month. China’s total imports in September were down 8.5%.

All of the above are producing some new safe-haven demand for the gold and silver markets.

Nymex crude oil prices are solidly lower and trading around $53.00 a barrel today. The other key “outside market” sees the U.S. dollar index moderately up in midday U.S. trading.

There were no major U.S. economic data released Monday, as banks and the U.S. government are closed for the Columbus Day holiday.

Technically, December gold futures prices were near mid-range at midday today. The bulls have the overall near-term technical advantage but a five-week-old downtrend is still in place on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the late-September high of $1,543.30. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the October low of $1,465.00. First resistance is seen at Friday’s high of $1,508.00 and then at $1,520.00. First support is seen at today’s low of $1,487.10 and then at last week’s low of $1,478.00. Wyckoff's Market Rating: 6.5

December silver futures were nearer the session high at midday today. The silver bulls have the overall near-term technical advantage. However, a five-week-old downtrend is still in place on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $18.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the October low of $16.94. First resistance is seen at last week’s of $18.00 and then at $18.25. Next support is seen at last week’s low of $17.305 and then at $17.00. Wyckoff's Market Rating: 6.0.