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Gold Rallies To 4-Week High On Slumping U.S. Dollar, New Uncertainty

(Kitco News) - Gold prices ended the U.S. day session solidly higher Thursday, boosted by a sharply lower U.S. dollar index and some new uncertainty injected into the marketplace following Wednesday’s minutes from the Federal Reserve’s Open Market Committee (FOMC).  February Comex gold was last up $16.20 an ounce at $1,181.50. March Comex silver was last up $0.058 at $16.60 an ounce.

The U.S. dollar index saw strong losses Thursday on a corrective pullback after the index scored a 13-year high on Tuesday. The greenback was also pressured by the FOMC minutes from Wednesday afternoon that were deemed a bit dovish on U.S. monetary policy, suggested that further U.S. dollar strength could restrain U.S. economic growth, and hinted the Federal Reserve is a bit uneasy about the incoming President Donald Trump and his proposed economic policies.

The other key “outside market” on Thursday saw Nymex crude oil prices trading higher, supported in part by the dropping U.S. dollar index.

The U.S. ADP national employment report Thursday showed a reading of up 153,000 jobs in December. That number was a bit lower than market expectations and also helped to lift gold prices. The next big data point will be Friday’s U.S. employment report from the Labor Department. Many markets could see increased volatility in the aftermath of Friday morning’s jobs report. The key non-farm payrolls number is forecast to come in at up around 185,000 in December.

(Note: Follow me on Twitter--@jimwyckoff--for breaking market news.)

Live 24 hours gold chart [Kitco Inc.]

Technically, February gold futures bears still have the overall near-term technical advantage but the bulls are having a very good week. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,200.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at the December low of $1,124.30. First resistance is seen at Thursday’s high of $1,185.90 and then at $1,190.00. First support is seen at $1,175.00 and then at Thursday’s low of 1,163.60. Wyckoff’s Market Rating: 3.5

Live 24 hours silver chart [ Kitco Inc. ]

March silver bears have the firm overall near-term technical advantage, but prices did hit a three-week high today. Silver bulls’ next upside price breakout objective is closing futures prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the December low of $15.675. First resistance is at today’s high of $16.76 and then at $17.00. Next support is seen at the overnight low of $16.455 and then at Wednesday’s low of $16.30. Wyckoff's Market Rating: 3.0.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com

 

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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