(Kitco News) – Gold futures prices are down sharply and hit a 5.5-month low at the start of US trading on Monday. Silver fell to its lowest level in nine weeks. Traders and investors have been showing low risk aversion recently, amid no geopolitical hotspots at the moment, are hoping for the Covid-19 vaccine and a seemingly smoother transition of US presidential office. All of this is bearish for safe haven metals. February gold futures were last down $ 17.50 to $ 1,770.30 and March ExCom silver last fell $ 0.499 to $ 22.14 per ounce.
Global stock markets were mixed overnight. US stock indices are also showing mixed openings at the start of the New York session. There have been reports in recent days that a Covid-19 vaccine will be on the market, to some extent, by the end of this year, which is much sooner than expected. However, the somewhat hampered enthusiasm among traders and investors on this last trading day of the month is that the outgoing Trump administration will further sanction large Chinese companies in the coming weeks.
Copper prices in Shanghai hit an eight-year high on Monday, while prices in London are more than four years high. China’s strong economic recovery continues, with the latest data showing its November Manufacturing Purchasing Managers Index (PMI) at 52.1 from 51.4 in October and expected 51.5. The non-manufacturing PMI stood at 56.4 in November versus 56.2 last month and 56.0 expected. The official manufacturing PMI was the highest since September 2017, while the manufacturing PMI was the highest since June 2012. There is speculation that a Chinese copper producer has sold copper futures at lower price points and is now caught in a “short press” situation.
The US dollar index is lower and hit a 2.5 year low early today. The other important external market sees January Nymex crude oil futures prices lower and trading around $ 44.75 per barrel. There is an OPEC meeting starting Monday and will be closely watched by the market. The yield on benchmark 10-year US Treasury bond futures is currently trading at 0.85%.
U.S. economic data due for release Monday includes the Chicago ISM Business Survey, Pending Home Sales and the Texas Manufacturing Survey.
Technically, February’s bearish gold futures have the overall short-term technical advantage. Prices have been in a strong downtrend for the past three weeks on the daily bar chart. The next bull price target is to produce a December futures close above the strong resistance at $ 1,860.00. The next short-term price drop target for the Bears is to push futures prices under strong technical support at $ 1,700.00. First resistance is seen at the overnight high of $ 1,793.30 and then at $ 1,800.00. First support is seen at the overnight low of $ 1,767.20 and then at $ 1,750.00. Wyckoff Market Rating: 4.0
March silver futures have a slight overall short-term technical advantage as prices are now trending lower. The next bullish price target for Silver Bulls is to close prices above strong technical resistance at $ 24.00 an ounce. The next lower price target for the bears is to close prices below solid support at the September low of $ 21.93. First resistance is seen at the overnight high of $ 22.83 and then at $ 23.00. The next support is seen at $ 21.93 and then at $ 21.50. Wyckoff Market Rating: 4.5.
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