Gold price firmer as safe-haven demand featured

(Kitco News) – Gold prices are a bit higher in early U.S. trading Tuesday, on more safe-haven buying as the Israel-Hamas war continues to unfold with very uncertain consequences. December gold was last up $4.70 at $1,869.00 and December silver was down $0.124 at $21.80.

The marketplace is keenly focused on the Middle East as Israel has declared war on Hamas. Many veteran market watchers, including this one, have been surprised the marketplace has not reacted more strongly to the major geopolitical crisis. The Wall Street Journal reported financial markets reacted more strongly to last Friday’s U.S. jobs report than they did to the weekend violence in the Middle East that for Israel was the worst in 50 years. One respected CNBC commentator summed it up by saying at present the marketplace is not factoring in a further escalation in the Israel-Hamas conflict, meaning no other countries like Iran, Syria or the U.S. will become significantly involved. Many times when unexpected market shocks like this one occur, traders and investors quickly factor into market prices a worst-case outcome, on a knee-jerk reaction. Then, as the worst-case scenario does not play out, market prices begin to retrace their initial big moves. Not the case this time. This veteran market watcher finds it unlikely the Israel-Hamas war will not significantly involve any of the aforementioned countries, which would mean a significant escalation in the conflict. To put in simply: This matter will very likely get worse before it gets better. Beware traders and investors.

Asian and European stocks were mostly higher overnight. U.S. stock indexes are pointed to firmer openings when the New York day session begins.

The key outside markets today see the U.S. dollar index modestly lower. Nymex crude oil prices are near steady and trading around $86.25 a barrel. The yield on the benchmark U.S. Treasury 10-year note yield is presently fetching 4.67%. The yield has down-ticked a bit early this week on flight-to-quality buying amid the Middle East turmoil.

U.S. economic data due for release Tuesday includes the NFIB small business index, the Johnson Redbook retail sales report and monthly wholesale trade.

Technically, the gold futures bears still have the firm overall near-term technical advantage. However, Friday’s “outside day” up on the daily chart and then Monday’s gap-higher price move are early clues that a market bottom is in place. Prices are in a four-month-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $1,900.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at the overnight high of $1,879.10 and then at $1,900.00. First support is seen at Monday’s low of $1,857.50 and then at $1,850.00. Wyckoff’s Market Rating: 2.5

The silver bears still have the firm overall near-term technical advantage. Prices are still trending lower on the daily bar chart. Silver bulls’ next upside price objective is closing December futures prices above solid technical resistance at $23.00. The next downside price objective for the bears is closing prices below solid support at $20.00. First resistance is seen at $22.00 and then at this week’s high of $22.18. Next support is seen at $21.50 and then at $21.25. Wyckoff’s Market Rating: 2.5.

If you have not done so, I encourage you to try out my new “Markets Front Burner” email report. I think it’s one of my best products yet (free!) in my 40-year quest to help you become a better trader and investor. It’s a weekly email report that highlights the latest developments in the marketplace, and how you can better manage those developments in your own trading/investing. Just try it for one week—I guarantee you will want to keep it coming. Sign up to my new, free weekly Markets Front Burner newsletter.