Gold Up On Short Covering, Weaker Greenback

(Kitco News) - Gold prices are moderately higher in early U.S. trading Wednesday, supported on somebuying back of previously sold positions (short covering) by the shorter-termfutures traders. A lower U.S. dollar index on this day is also supporting somebuying interest in the precious metals markets. December gold futures were lastup $4.30 an ounce at $1,207.20. December Comex silver was last up $0.035 at $14.22an ounce.

Worldstock markets were mixed to firmer overnight. U.S. stock indexes are pointedtoward slightly lower openings when the New York day session begins. Therecontinues to be little to sometimes only modest risk aversion in the worldmarketplace at present, and that continues to limit the upside in thesafe-haven gold and silver markets.

Amida lack of other fresh fundamental news so far this week, focus remains on thetrade war between the U.S. and China. The U.S. hit China with more tariffs thisweek and China vowed to retaliate. Many traders and investors took note Tuesdayof a comment by Alibaba founder Jack Ma, who said the trade dispute between theworld’s two largest economies could take decades to resolve. Ma implied thatthe Chinese culture won’t allow that nation to “give in.” But Americans reckonPresident Trump won’t either. The U.S.-China trade war and the recent strengthof the U.S. dollar have hit emerging markets and their currencies hard the pastfew months.

Theother key outside market today finds Nymex crude oil prices near steady andtrading just below $70.00 a barrel.

U.S.economic data due for release Wednesday includes the weekly MBA mortgageapplications survey, new residential construction and the weekly DOE liquidenergy stocks report.

Technically,gold bears have the overall near-term technical advantage. However, recentsideways price action favors the bulls and suggests a market bottom is inplace. Gold bulls' next upside near-term price breakout objective is to producea close in December futures above solid resistance at $1,220.70. Bears' nextnear-term downside price breakout objective is pushing prices below solidtechnical support at the August low of $1,167.10. First resistance is seen at thisweek’s high of $1,209.70 and then at last week’s high of $1,218.00. Firstsupport is seen at this week’s low of $1,197.50 and then at last week’s low of$1,192.70. Wyckoff's Market Rating: 3.0

Decembersilver futures bears have the solid overall near-term technical advantage.Silver bulls' next upside price breakout objective is closing prices abovesolid technical resistance at $15.00 an ounce. The next downside price breakoutobjective for the bears is closing prices below solid support at $13.50. Firstresistance is seen at last week’s high of $14.39 and then at $14.50. Nextsupport is seen at this week’s low of $14.065 and then at last week’s low of $13.965.Wyckoff's Market Rating: 1.5.

By Jim Wyckoff

For Kitco News

Follow @jimwyckoffjwyckoff@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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