Gold prices rose slightly during the US midday trading session on Tuesday (December 16), while silver prices remained nearly unchanged. A series of previously released economic data indicated that the US economy was neither overheating nor cooling down too quickly.



Gold and silver prices were weak in overnight trading and ahead of the release of US economic data, but both metals recovered their losses and rose slightly after the data release. February gold futures were trading at $4,341.4 per ounce (generally a dozen dollars higher than spot gold), up $6.2; March silver futures were trading at $63.715 per ounce, up $0.126.

U.S. nonfarm payrolls increased by 64,000 in November, compared with a decrease of 105,000 in October, further highlighting the volatility in the U.S. labor market in recent months. The overall unemployment rate rose to 4.6%, higher than the market expectation of 4.5%, and continues to rise, with many unemployed Americans still struggling to find new jobs.

Another report released Tuesday showed that U.S. retail sales were largely flat in October, with declines in auto dealer sales and lower gasoline revenue offsetting increases in other categories of spending. Data from S&P Global showed that U.S. business activity expanded at its slowest pace in six months in December, while the input price index surged to its highest level in more than three years.

Key external market performance today is as follows: the US dollar index fell slightly; crude oil prices fell sharply, hitting an eight-month low, and are currently trading at around $55.25 per barrel; the benchmark 10-year US Treasury yield is currently at 4.16%.


(COMEX Gold Daily Chart Source: FX678)

From a technical perspective, the next upside target for February gold futures bulls is a close above the key resistance level – the contract's all-time high of $4433.00/oz. The near-term downside target for bears is to push futures prices below the key technical support level of $4200.00/oz. The first resistance level is seen at today's high of $4367.90/oz, followed by last week's high of $4387.80/oz; the first support level is the overnight low of $4297.40/oz, followed by $4250.00/oz.

The next upside target for March silver futures bulls is a closing price break above the key technical resistance level of $67.50/oz. The next downside target for bears is a closing price break below the key support level of $57.00/oz. The first resistance level is this week's high of $64.26/oz, followed by the all-time high of $65.085/oz; the next support level is seen at this week's low of $61.605/oz, followed by $61.00/oz.

Note: The gold market operates primarily through two pricing mechanisms. The first is the spot market, where prices are quoted for immediate purchase and delivery; the second is the futures market, which determines the price for delivery on a future date. Due to year-end position adjustments and market liquidity, the most actively traded gold futures contract on the Chicago Mercantile Exchange (CME) is currently the December contract.