Price weakness in gold, silver, as risk appetite up

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Gold futures prices are moderately down in early U.S. trading Monday. Both metals are seeing some pressure from better risk appetite in the marketplace to start the trading week. A lower U.S. dollar index that fell to a seven-week low overnight is limiting the downside for the metals. December gold futures were last down $7.50 at $1,864.90 and December Comex silver was last down $0.283 at $24.08 an ounce.

Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Risk sentiment is more upbeat to start the trading week, as another vaccine trial, this time from the U.K.’s Oxford University and AstraZeneca, was shown to be 90% effective. There is a general consensus in the marketplace that by the second half of 2021 the pandemic will be tamped down and economies will be well on the road to returning to normal. Still, there were more than 142,000 new U.S. Covid-19 infections reported Sunday and record hospitalizations for the 13th straight day, suggesting the pandemic is still raging out of control. Europe is also reeling from the impact of the virus.

The Euro zone flash purchasing managers index (PMI) showed the region heading toward a possible double-dip recession, with November’s data the first since severe lockdown measures were re-introduced in many areas. The flash composite PMI fell to 45.1 in November vs 50.0 in October. The Euro zone manufacturing PMI fell to 53.6 vs 54.8 last month and 53.1 expected. The services PMI fell to 41.3 vs 46.9 in October and 42.5 expected.

The U.S. dollar index is lower early today and hit a seven-week low. The other important outside market sees January Nymex crude oil futures prices firmer and trading around $42.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading at 0.85%.

U.S. economic data due for release Monday includes the Chicago Fed national activity index, the U.S. flash manufacturing PMI, and the flash services PMI.

Live 24 hours gold chart [Kitco Inc.]

Technically, the December gold futures bulls still have the overall near-term technical advantage but trading has been choppy. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at the November high of $1,966.10. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,848.00. First resistance is seen at the overnight high of $1,875.00 and then at $1,885.00. First support is seen at last week’s low of $1,850.00 and then at $1,848.00. Wyckoff’s Market Rating: 6.5

December silver futures bulls have the overall near-term technical advantage.

Live 24 hours silver chart [ Kitco Inc. ]

Silver bulls’ next upside price objective is closing prices above solid technical resistance at $27.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the October low of $22.625. First resistance is seen at the overnight high of $24.455 and then at $24.78. Next support is seen at the overnight low of $23.905 and then at last week’s low of $23.67.

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