Gold and silver prices experienced a slight decline in early U.S. trading on Monday, influenced by the recent increase in trader and investor risk appetite. The solid rally in U.S. stock indexes last week demonstrated a shift away from risk aversion, putting pressure on precious metals. December gold fell by $8.10 to $1,991.10, while December silver dropped $0.035 to $23.25.
Asian and European markets showed mostly positive performance in overnight trading, and U.S. stock indexes are expected to open slightly higher following last week’s gains. The Israel-Hamas conflict has remained relatively stable, without major unexpected developments involving other countries. This has boosted market sentiment and allowed traders and investors to focus on normal market fundamentals, diverting safe-haven demand from gold and silver.
In overnight news, Bank of Japan Governor Ueda expressed the commitment to continue monetary policy easing and yield-curve control. Ueda’s statement, along with expectations of the Japanese government 10-year note yield remaining below 1.0%, has been favorable for foreign exchange and financial markets traders engaging in the U.S.-Japan interest rate differential strategy, also known as “carry trades.”
In the broader markets, the U.S. dollar index showed a slight decrease, while Nymex crude oil prices rose to around $81.50 per barrel. The yield on the benchmark U.S. Treasury 10-year note stood at 4.593%.
Today’s U.S. economic data releases include the employment trends index and the global services purchasing managers index (PMI).
From a technical standpoint, gold futures maintain a near-term advantage for the bulls. Prices are trending higher on the daily bar chart, with the next upside target set at closing December futures above strong resistance at $2,050.00. On the downside, bears would aim to push prices below solid technical support at $1,950.00. Initial resistance levels are seen at $2,000.00 and $2,010.00, while support levels are at $1,985.00 and last week’s low of $1,978.20. Wyckoff’s Market Rating for gold: 6.0.
As for silver, the bulls hold a slight overall advantage in the near term. Their next objective is to close December futures prices above substantial technical resistance at $24.00. On the downside, the bears’ target is to close prices below solid support at $22.00. Key resistance levels lie at $23.50 and $23.88, while support levels can be found at $23.00 and $22.565. Wyckoff’s Market Rating for silver: 5.5.
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