Gold sees slight price rise amid deflating U.S. dollar
New York (Dec 29) Gold futures prices are slightly up in early U.S. trading Tuesday, getting a bit of a lift from a depreciating U.S. dollar on the foreign exchange market. Still, the safe-haven gold and silver bulls are being constrained by rallying U.S. and global equity markets that see the U.S. stock indexes at record highs. February gold futures were last up $3.00 at $1,883.40 and March Comex silver was last down $0.214 at $26.325 an ounce.
Global stock markets were mostly up overnight. U.S. stock indexes are pointed toward higher openings and new record highs when the New York day session begins. For the year 2020 the Nasdaq index will gain around 43%, with the S&P 500 gaining around 15%, after it gained 29% in 2019. These numbers underscore how the stock market has really been the only game in town for most investors the past couple years. Easy money from the major central banks of the world during this time has helped propel the global equities markets. Still, many veteran market watchers that have lived through bear markets in stocks wonder when the present bullish and possibly well over-inflated balloon will finally pop.
The stock markets and investor risk appetite this week got a boost from the surprise weekend move by President Trump to sign a Covid-19 aid package for Americans. Then the U.S. House of Representatives on Monday voted to give Americans $2,000 payments instead of the $600 stipulated in the bill signed by Trump. Trump wants the $2,000 payments. Now, it’s up to the Republican-controlled U.S. Senate to agree to the increase, or defy Trump for the first time.
On Monday Covid-19 hospitalizations in the U.S. hit a new record high as the pandemic is still raging, keeping restrictions on businesses and the public in place and new ones being implemented. At present, traders and investors are preferring to focus on the current, major rollout of a Covid vaccine that is likely to tamp down the virus by summertime.
The U.S. dollar index is lower in early U.S. trading. The other important outside market sees February Nymex crude oil futures prices higher and trading around $48.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note futures is currently around 0.945%.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the weekly chain store sales index and the S&P-Core-Logic home price indexes.
Technically, the February gold futures bulls have the overall near-term technical advantage amid a price uptrend still in place on the daily bar chart. However, bulls need to show fresh power soon to keep the uptrend alive. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at the November high of $1,973.30. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,820.00. First resistance is seen at the overnight high of $1,887.80 and then at $1,900.00. First support is seen at the Monday’s low of $1,873.00 and then at last week’s low of 1,859.00.
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