Gold, Silver Slightly Up As U.S. Dollar Weakness Resumes
(Kitco News) - Gold and silver markets are modestly higher in early U.S. trading Tuesday. A weaker U.S. dollar index is working in favor of the precious metals market bulls on this day. April Comex gold futures were last up $0.90 an ounce at $1,345.80. March Comex silver was last up $0.043 at $17.185 an ounce.
World stock markets were mostly weaker overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. The equities markets worldwide are a bit worried about rising bond yields. The U.S. 10-year note rose to a more-than-three-year high yield Monday. If the global stock markets finally come off their highs in significant fashion, such would be bullish for the competing asset class of gold and silver.
In overnight news, the Euro zone reported its fourth-quarter gross domestic product at up 0.6% from the third quarter and up 2.7%, year-on-year. Those numbers were in line with market expectations.
This is a busy events week for the marketplace. Tuesday evening President Trump delivers his state-of-the-union speech. The Federal Open Market Committee (FOMC) meets Tuesday and Wednesday, which will be Fed Chair Janet Yellen’s last meeting. And on Friday the monthly U.S. employment situation report from the Labor Department is due out.
The key “outside markets” on Tuesday morning see the U.S. dollar index lower and not far above last week’s 3.5-year low. Meantime, Nymex crude oil prices are also lower and trading around $65.00 a barrel. A rising U.S. oil rig count, reported last Friday, is bearish for oil this week.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the S&P/Case-Shiller home price index, the consumer confidence index, and the FOMC meeting begins.
Technically, April gold futures bulls have the overall near-term technical advantage. Prices are still in a six-week-old uptrend on the daily bar chart, but the bulls need to show fresh power soon to keep it in place. Bulls’ next upside technical objective is pushing and closing prices above chart resistance at the January high of $1,370.50. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,320.00. First support is seen at today’s low of $1,337.50 and then at $1,330.00. First resistance is seen at $1,350.00 and then at Monday’s high of $1,356.30. Wyckoff’s Market Rating: 6.5
March silver bulls have the overall near-term technical advantage. A choppy, six-week-old price uptrend is in place on the daily bar chart. The next upside price breakout objective is closing futures prices above solid technical resistance at $18.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the January low of $16.735. First resistance is seen at today’s high of $17.26 and then at Monday’s high of $17.47. Next support is seen at $17.00 and then at the January low of $16.735. Wyckoff's Market Rating: 6.0.