Gold And Silver Prices Gain On Demand Hopes, Lower USDX
New York (Dec 3) Gold and silver prices are higher in early-afternoon U.S. trading Monday, as the weekend agreement reached between the U.S. and China to a temporary halt their heretofore escalating trade war has prompted some hopes of better worldwide demand for precious metals. Gold prices pushed to a three-week high today. February gold futures were last up $12.00 an ounce at $1,237.90. March Comex silver was up $0.288 at $14.505 an ounce.
Risk appetite was back in full force to start the trading week, following the weekend news out of the G20 meeting in Argentina that the U.S. and China have agreed on a cease-fire in their trade war. Asian and European stock markets rallied sharply, while crude oil prices were also posting good gains on hopes for better world economic growth if the two largest economies stop their trade hostilities. U.S. stock indexes are solidly higher at midday, but well off their daily highs.
The U.S. dollar index is lower today as secondary world currencies were boosted on the U.S.-China truce. That’s a bullish outside market force for the metals markets. There are notions a U.S.-China trade agreement would lessen demand for the safe-haven greenback and make the secondary currencies look more attractive.
The U.S.-China trade cease-fire gave traders and investors a double-barrel shot of upbeat news, following last week’s surprisingly dovish comments coming from Federal Reserve Chairman Jay Powell.
In other news, the OPEC oil cartel meeting is getting under way in Vienna, Austria. Reports said Qatar plans to pull out of the cartel in January. Oil prices were also lifted today in part on comments from Russian and Saudi Arabian officials that they want to extend production cuts.
The death of former U.S. President George H.W. Bush over the weekend gives the U.S. financial markets an unexpected mid-week closure on Wednesday, for a national day of mourning. Other U.S. markets trade normal hours Wednesday.
Live 24 hours gold chart [Kitco Inc.]
Technically, the gold bears still have the overall near-term technical advantage but a price downtrend has been negated and a fledgling uptrend line is now in place on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close in February futures above solid technical resistance at the October high of $1,252.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the November low of $1,202.00.
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