Gold Price Hits 2-Mo. High On Safe-Haven Demand, Weakening Greenback
San Francisco (Jan 17) Gold prices were ending the U.S. day session solidly higher and hit a nearly two-month high Tuesday. Resurfacing worries about the U.K. leaving the European Union prompted some safe-haven demand for gold today. British Prime Minister Theresa May said at a press conference today the U.K. ostensibly wants completely out of the EU, which is causing uncertainty among many European market participants. February Comex gold was last up $17.40 an ounce at $1,213.70. March Comex silver was last up $0.265 at $17.03 an ounce.
A sharply lower U.S. dollar index that hit a four-week low Tuesday also worked in favor of the precious metal market bulls. President-Elect Donald Trump said in an interview with the Wall Street Journal that the U.S. dollar is “too strong” for fair trading of U.S. goods and services.
Trump will be inaugurated as U.S. president on Friday, and that’s also adding some uncertainty to the world marketplace, which favors gold. Trump’s stated ambitious economic growth plans have so far lacked specifics, which is worrisome to many market watchers.
The other key “outside market” on Tuesday saw Nymex crude oil prices trade modestly higher on bullish remarks from Saudi Arabia’s oil minister, who said that by mid-year the OPEC oil-production cuts will rebalance the world supply and demand situation for oil. There remain stiff technical chart resistance layers that lie just above the crude oil market.
In other overnight news, the German government auctioned a two-year note (Schatz) at a record average low yield of minus 0.75%. The record-low German note yield underscores the keener uncertainty in the European marketplace at present.
The World Economic Forum in Davos, Switzerland, began Tuesday. Movers and shakers from all over the world attend this meeting.
Technically, February gold futures prices closed nearer the session high today and hit a seven-week high. The gold bulls and bears are now on a level overall near-term technical playing field but the bulls have momentum. Prices are in a four-week-old uptrend on the daily bar chart. That suggests prices can continue to trend sideways to higher in the near term. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,236.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,175.00.
Source: KitcoNews
