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Modest gains for gold, silver amid bullish competing assets

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Kitco News has launched its 2021 Outlook, which offers the most comprehensive coverage of precious metals markets in the new year. Trillions of dollars were pumped into financial markets in 2020 and that won't come without consequences. Economists expect that investors will be Bracing For Inflation in 2021.

(Kitco News) - Gold and silver futures prices are mildly higher in midday U.S. trading Thursday, on a rebound from the strong selling pressure seen on Wednesday. Gains in the two precious metals are tepid, however, as the U.S. and global stock markets continue to power higher. February gold futures were last up $5.70 at $1,914.30 and March Comex silver was last up $0.218 at $27.255 an ounce.

Global stock markets were mostly up overnight. U.S. stock indexes are pointed higher and at or near record highs at midday. The stock and financial markets have ignored the protesters that stormed and then occupied for several hours the U.S. Capitol Wednesday afternoon. Congress was disrupted but a few hours later voted to confirm Joe Bident as the next U.S. president. There was also, at least initially, not much markets reaction to the two Georgia U.S. Senate seats that went to the Democrats and gave them the majority in the Senate and in Congress.

Said one market analyst in an email dispatch Thursday morning, “The reflation trade is back on,” referring to the likely big government spending by the Democrats in the next couple years. Indeed, an examination of the actions of the raw commodity futures markets sees many of them rallying to multi-month or multi-year highs, led by Nymex crude oil futures surging to a 10-month high of $51.28 a barrel overnight. The U.S. dollar index has rebounded Thursday from a 2.5-year low hit on Wednesday. Still, the USDX is in deep technical trouble as a price downtrend remains firmly in place. The other market suggesting inflation is on the rise is the U.S. Treasury market, whose 10-year note yield this week has pushed above 1.0%. Thursday the 10-year was yielding 1.044%.

It’s hard for the general marketplace to ignore the price action in Bitcoin recently, as the crypto currency hit a record high above $41,000 on Thursday. Some are calling Bitcoin “the new gold” but of course that’s highly debatable.

The Employment Situation Report issued by the Labor Department comes out on Friday morning. That report is expected to show a U.S. unemployment rate of 6.8% and a non-farm jobs rise of 50,000 in December, versus a rise of 245,000 in November. However, the big miss on the downside in the ADP national employment report on Wednesday has many thinking the same will occur in Friday’s jobs report—a big contraction in non-farm jobs.

Live 24 hours gold chart [Kitco Inc.]

Technically, February gold futures bulls have the overall near-term technical advantage. A five-week-old price uptrend is still in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at this week’s high of $1,962.50. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,850.00. First resistance is seen at today’s high of $1,929.60 and then at $1,950.00. First support is seen at $1,900.00 and then at $1,890.00. Wyckoff's Market Rating: 6.5

Live 24 hours silver chart [ Kitco Inc. ]

March silver futures bulls have the firm overall near-term technical advantage. A five-week-old price uptrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the August 2020 high of $30.365 an ounce. The next downside price objective for the bears is closing prices below solid support at $26.00. First resistance is seen at today’s high of $27.495 and then at $27.635. Next support is seen at this week’s low of $26.70 and then at $26.50. Wyckoff's Market Rating: 7.0.

March N.Y. copper closed up 480 points at 369.85 cents today. Prices closed nearer the session high today and hit an eight-year high. The copper bulls have the solid overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 375.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 345.00 cents. First resistance is seen at today’s high of 371.15 cents and then at 373.00 cents. First support is seen at today’s low of 364.05 cents and then at 360.00 cents. Wyckoff's Market Rating: 8.5.

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.