Gold prices ticked slightly higher while silver eased lower in quiet midday Monday trading. After a week of heightened volatility, both metals appear to be stabilizing as investors await a fresh fundamental spark to drive the next market move.
As of the latest session, December gold futures rose $13.20 to $4,010.40, while December silver slipped $0.105 to $48.055. The modest recovery in gold suggests renewed confidence among bulls after recent choppy sessions.
China Ends Long-Standing Gold Tax Incentive
In a key development from Asia, China has announced the removal of a long-running tax incentive that previously allowed gold retailers to offset value-added tax (VAT) when selling gold.
The change impacts both investment-grade products—like high-purity bars and ingots—and non-investment uses, such as jewelry and industrial materials. Analysts note that the move may boost government revenues but could also raise retail gold prices for Chinese consumers, potentially slowing local demand in the near term.
Market Backdrop: Dollar Slightly Stronger, Oil Firms Up
In broader financial markets, the U.S. Dollar Index is showing modest strength, keeping a lid on precious metals momentum. Crude oil prices are firmer, trading around $61.25 per barrel, while the 10-year U.S. Treasury yield sits at 4.11%, indicating steady investor sentiment across risk assets.
Understanding the Gold Market: Spot vs. Futures
The gold market operates through two main pricing mechanisms:
- Spot Market: Reflects real-time prices for immediate transactions and delivery.
- Futures Market: Represents contracts for future delivery, commonly used by institutional traders to hedge or speculate.
Currently, the December gold futures contract is the most actively traded on the CME, driven by year-end positioning and lower liquidity across other delivery months.
Technical Outlook: Gold and Silver Levels to Watch
Gold (December Futures)
- Resistance: $4,043.10 (overnight high), $4,059.90 (Friday’s high)
- Support: $3,971.30 (today’s low), $3,950.00 (secondary support)
- Upside Target: Close above $4,100.00
- Downside Target: Break below $3,800.00
- Wyckoff Market Rating: 6.0 (moderate bullish bias)
Silver (December Futures)
- Resistance: $49.00 and $49.225
- Support: $47.80 and $47.00
- Upside Target: Close above $50.00
- Downside Target: Fall below $45.00
- Wyckoff Market Rating: 6.0 (balanced but cautiously bullish)
Market Sentiment: Waiting for the Next Trigger
Traders appear to be in a holding pattern, monitoring developments that could trigger stronger directional movement. Whether it’s macroeconomic data, central bank commentary, or policy changes out of Asia, the next fundamental catalyst will determine if gold can push past $4,100 or retreat toward support.
With both metals holding near key levels, the short-term tone remains cautiously optimistic. For investors, this could be an opportune time to closely track resistance zones and global policy headlines that often dictate short-term volatility in precious metals.
