Gold prices are down in midday U.S. trading Monday but well up from their session lows. The yellow metal hit a three-week low early on today. Amid a lack of major fresh, fundamental news to start the trading week, precious metals traders are focusing on the outside markets, and raw commodity sector leader crude sees its price sharply down. February gold was last down $10.90 at $2,038.70. March silver was last up $0.065 at $23.385.
Asian and European stock markets were mixed overnight. U.S. stock index futures are mixed at midday.
In weekend news, U.S. congressional leaders have agreed upon a bipartisan federal budget plan for the next year. The House and Senate now have about two weeks to pass the measure, which may not be easy.
This coming week, the Federal Reserve is expected to back off on its tighter monetary policy, as U.S. inflation has cooled in recent months. The CPI report is seen up 3.3%, year-on-year versus a rise of 3.1% in the November report.
The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are strongly lower and trading around $70.25 a barrel. Reports said Saudi Arabia has lowered the price of its oil to some of its customers, in a signal of a weaker demand outlook. Meantime, the yield on the benchmark U.S. Treasury 10-year note is presently fetching 3.974%.
Technically, February gold futures bulls have the overall near-term technical advantage but have faded a bit. Prices are still in a three-month-old uptrend on the daily bar chart. On the other hand, March silver futures bears have the overall near-term technical advantage. A five-week-old downtrend is in place on the daily bar chart.
In addition to these trends, traders should keep an eye on Asian and European stock markets and U.S. stock index futures, as they could impact gold prices in the coming days. Furthermore, the bipartisan federal budget plan and volatility in Nymex crude oil prices will also affect gold prices moving forward.
