Gold and silver see downside corrections after recent gains
New York (Dec 9) Gold and silver futures prices are lower at midday Wednesday, on normal corrective pullbacks from recent good gains. Also, there is less risk aversion in the marketplace at mid-week than what was apparent earlier this week, which is bearish for the safe-haven metals. Still, recent upside price action suggests near-term market bottoms are in place for gold and silver. February gold futures were last down $22.00 at $1,852.90 and March Comex silver was last down $0.511 at $24.225 an ounce.
Gold and silver market bulls need a spark in the form of fresh geopolitical unrest. There are some usual potential hotspots, such as Iran, North Korea and other regions, but none have flared up recently. Don’t be surprised if something, somewhere occurs in the coming weeks to give the two precious metals some upside footing.
U.S. stock indexes are a bit weaker at midday after some hit more record highs overnight. The marketplace continues to generally look over the horizon into 2021, when most believe the Covid-19 pandemic will be tamped down by successful vaccines taken by hundreds of million people and major global economies will be well on the road to full recoveries. However, the World Health Organization has just said, “The epidemic in the U.S. is punishing. It’s widespread. It’s quite frankly shocking to see one to two persons a minute die in the U.S." The virus is blamed for more than 286,000 deaths and over 15 million confirmed infections in the U.S. New records on daily deaths, infections and hospitalizations continue to be set in the U.S.
Traders and investors are also more upbeat on the increasing likelihood the U.S. Congress will soon pass a financial aid package for Americans that totals just under $1 trillion.
The U.S. dollar index is firmer at midday today and near its daily high. The other important outside market sees January Nymex crude oil futures prices a bit weaker and trading around $45.30 a barrel. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading at 0.9%.
Technically, February gold futures saw corrective pullback after prices hit a three-week high on Tuesday. The gold bulls and bears are on a level overall near-term technical playing field. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $1,900.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at this week’s high of $1,879.80 and then at $1,900.00. First support is seen at today’s low of $1,840.70 and then at $1,825.00.
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