(Kitco News) - Gold prices are moderately higher in early U.S. trading Monday as heightened geopolitical tensions keep a safe-haven bid in the market. August Comex gold was last up $8.70 at $1,318.00 an ounce. Spot gold was last quoted up $5.60 at $1,317.00. December Comex silver last traded up $0.261 at $21.205 an ounce.
Geopolitics remains on the front burner of the market place early this week. Last week’s downing of a Malaysian airliner on the Russia-Ukraine border and Israel’s ground offensive against Hamas on the Gaza strip are the dominant fundamentals in the markets Monday morning. The U.S. has accused Russian separatists of shooting down the Malaysian passenger jet. After some initial trepidation European leaders have condemned Russia and its president, Vladimir Putin. Meantime, Israel continues to try to root out Hamas and its missile launchers on the Gaza strip. So far, the Israel-Hamas conflict has not spread to unrest in other Middle Eastern regions. However, these two major geopolitical matters are flashpoints for the markets and are likely to significantly influence trading and markets for at least the near term. My sense is that it’s presently a 50-50 chance that these two geopolitical matters have peaked as far as influencing markets.
Gold, U.S. Treasuries and the U.S. dollar are safe-haven assets that have seen support from the heightened world tensions. Surprising to many is the fact that U.S. stock indexes have been resilient during the geopolitical unrest. The three major U.S. stock indexes showed solid gains Friday and are not far below their recent record or multi-year highs.
U.S. economic data due for release Monday includes the Chicago Fed national activity index.
Wyckoff’s Daily Risk Rating: 8.0 (Russia-Ukraine crisis and Irael-Hamas conflict are front-burner matters for markets.)
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 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off), and 5 being neutral.
The London A.M. gold fix is $1,312.75 versus the previous P.M. fixing of $1,307.25.
Technically, August gold futures bulls and bears are on a level near-term technical playing field. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the July high of $1,346.80. Bears' next near-term downside breakout price objective is closing prices below solid technical support at last week’s low of $1,292.60. First resistance is seen at last week’s high of $1,325.90 and then at $1,330.00. First support is seen at the overnight low of $1,307.90 and then at $1,300.00.
December silver futures bulls have the slight near-term technical advantage amid choppy trading. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the July high of $21.67 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at last week’s low of $20.70. First resistance is seen at Friday’s high of $21.37 and then at $21.50. Next support is seen at $21.00 and then at Friday’s low of $20.84.
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By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff
