(Kitco News) - Gold prices are lower in early U.S. trading Friday and hovering near the 10-month low scored earlier this week. Rallying world stock markets suggest a keener “risk-on” psychology in the marketplace, and that’s bearish for safe-haven gold. A big rally in the U.S. dollar index late this week is also bearish for the precious metals markets. February Comex gold was last down $7.50 an ounce at $1,164.80. March Comex silver was last down $0.096 at $17.00 an ounce.
World stock markets were mostly firmer overnight. European stock markets benefited in part from Thursday’s European Central Bank meeting on monetary policy that was deemed dovish. Financial stocks in Europe have posted decent recoveries recently. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. The Dow and S&P 500 stock indexes have hit record highs this week.
Reports said Chinese demand for gold has picked up significantly as prices have pushed lower recently. This is the time of year when Asian demand for gold sees an increase. Gold prices are trading moderately lower and near the 10-month low scored earlier this week.
The marketplace is looking ahead to next week’s U.S. Federal Reserve FOMC meeting. Most believe the Fed will raise interest rates for the first time in a year.
The other key “outside market” on Friday finds Nymex crude oil prices firmer. Oil traders are awaiting the results of this weekend’s meeting between OPEC and non-OPEC oil producers in Moscow, regarding implementing the cartel’s stated intention to cut oil-production levels. Reports Friday said Saudi Arabia now says it will not cut its oil production if non-OPEC countries ramp up their production after OPEC cuts its own output. Some are skeptical that OPEC will actually cut its production. Precious metals bulls are frustrated that rallying oil prices recently have not helped their markets.
U.S. economic data due for release Friday includes the University of Michigan consumer sentiment survey and monthly wholesale trade data.
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Technically, February gold futures bears have the solid overall near-term technical advantage. Prices have been trending lower for over five months. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,200.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,150.00. First resistance is seen at the overnight high of $1,173.80 and then at $1,182.30. First support is seen at this week’s low of 1,158.60 and then at $1,150.00. Wyckoff’s Market Rating: 2.0
March silver bears have the overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing futures prices above solid technical resistance at $18.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the November low of $16.245. First resistance is at this week’s high of $17.30 and then at $17.50. Next support is seen at $16.705 and then at this week’s low of $16.545. Wyckoff's Market Rating: 2.5.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
