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Gold, silver hanging on to Tuesday's solid gains

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(Kitco News) - Gold and silver futures prices are steady to narrowly mixed in early U.S. trading Wednesday, but are holding on to the strong gains posted Tuesday. Short covering in the futures markets and perceived bargain buying in the cash markets were featured Tuesday, possibly prompting by a slumping U.S. dollar index that has this week hit a 2.5-year low. February gold futures were last up $2.60 at $1,821.70 and March Comex silver was last down $0.10 at $23.98 an ounce.

Global stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward modestly lower openings when the New York day session begins, on some mild profit taking after two major indexes hit record highs on Tuesday. Upbeat traders and investors continue to look at a bright light at the end of a dark Covid-19 tunnel—even though there will be a few more rough months ahead. Very successful vaccines for the pandemic virus will be rolling out to some of the general public as soon as this month.

Also buoying marketplace sentiment are renewed talks among U.S. congressional leaders on a financial stimulus package for Americans. U.S. Treasury Secretary Mnuchin and Federal Reserve Chairman Powell will testify today before a U.S. House committee and will likely be asked about the stimulus package and its prospects.

The U.S. economic data point of the day at mid-week is the November ADP national employment report, expected to show a rise of 475,000 jobs. This report is the precursor to Friday morning’s U.S. employment situation report from the Labor Department. The key non-farm payrolls number in that report is expected to come in at up 440,000 workers.

The U.S. dollar index is firmer early today after hitting a 2.5-year low Tuesday. The other important outside market sees January Nymex crude oil futures prices near steady and trading around $44.50 a barrel. The OPEC oil cartel is meeting this week and will be discussing keeping its present production cuts. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading at 0.92%.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, the ISM New York report on business, the weekly DOE liquid energy stocks report, and the Federal Reserve’s beige book.

Live 24 hours gold chart [Kitco Inc.]

Technically, the February gold futures bears still have the overall near-term technical advantage. Prices are in a three-week-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at $1,860.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at this week’s low of $1,767.20. First resistance is seen at the overnight high of $1,835.00 and then at $1,850.00. First support is seen at the overnight low of $1,810.50 and then at $1,800.00. Wyckoff's Market Rating: 4.0

Live 24 hours silver chart [ Kitco Inc. ]

March silver futures bulls and bears are back on a level overall near-term technical playing field, but bulls have some momentum on their side. Silver bulls' next upside price objective is closing prices above solid technical resistance at $25.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the September low of $21.93. First resistance is seen at the overnight high of $24.455 and then at $25.00. Next support is seen at the overnight low of $23.68 and then at $23.00. Wyckoff's Market Rating: 5.0.

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.