(Kitco News) - Gold prices are steady to slightly lower in early U.S. trading Thursday, on some profit-taking pressure and chart consolidation following recent good gains. The gold bulls remain in good shape, on a near-term basis. April Comex gold was last down $1.20 at $1,238.00 an ounce. March Comex silver was last down $0.112 at $15.185 an ounce.
Most world stock markets were firmer Thursday, on corrective rebounds from selling pressure seen the past couple days. U.S. stock indexes are pointed toward modestly higher openings Thursday. World equities markets continue to hinge upon the daily price movements of crude oil. Nymex crude oil futures on Thursday are near steady and are just above $32.00 a barrel. A Wall Street Journal survey shows big investment banks are less confident that crude oil prices will recover soon. The banks forecast an average crude oil price in 2016 of $39.00 a barrel. That’s down $11 from the same survey taken in January.
The Chinese stock market was the exception and sold off sharply Thursday, on worries about the health of China’s economy, which is the world’s second-largest. The Shanghai stock index closed down 6.4% on the day. For whatever reason, other world equities markets decided to ignore the sharp downturn in the Chinese stock market. China is still a focal point for world traders and investors. This week the Group of 20 industrial nations meets, and China’s economic issues are likely to be a major topic.
The Euro zone got another dose of dour economic news Thursday. The region’s consumer price index was reported down 1.4% in January, month-on-month, and was up just 0.3% year-on-year. While the figures were in line with forecasts, they underscore the deflationary price pressures that are presently gripping the European Union, and even the other major world economies.
A news report out Thursday said traders and investors worldwide have significantly stepped up their purchases of gold-backed exchange traded funds (ETFs) and other gold-based derivatives. Gold futures prices have rallied around 17% so far in 2016. The report highlighted that in just a short period of time the general public has really changed its tune about investing in gold—from bearish to bullish. The “smart money” in the marketplace can read this as hinting the gold market prices may have run too far, too fast, and need some time to consolidate now.
U.S. economic data due for release Thursday includes the weekly jobless claims report, durable goods orders, the quarterly and monthly house price indexes, and the Kansas City Fed manufacturing survey.
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Wyckoff’s Daily Risk Rating: 2.5 (Trader and investor market risk aversion is not elevated today.)
(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 5, with 1 being least risk-averse (most risk-on) and 5 being the most risk-averse (risk-off).
Technically, April gold futures prices are in a two-month-old uptrend on the daily bar chart and the bulls have the overall near-term technical advantage. Bulls’
March silver bulls and bears are on a level near-term technical playing field amid recent choppy trading. Silver bulls’ next upside price breakout objective is closing March futures prices above solid technical resistance at the February high of $15.99 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.50. First resistance is at the overnight high of $15.33 and then at $15.57. Next support is seen at $15.00 and then at this week’s low of $14.945. Wyckoff's Market Rating: 5.0.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff
