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Choppy price action in gold, silver as Biden set to lead U.S.

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(Kitco News) - Gold and silver futures prices lost overnight gains and then regained them and are trading modestly higher in early U.S. trading. U.S. stock indexes that are back near their record highs are a restraining element for the safe-haven metals at mid-week. However, gold and silver prices have rebounded well off this week’s lows, and more price gains this week would suggest both metals have put in near-term bottoms. February gold futures were last up $7.00 at $1,847.00 and March Comex silver was last up $0.04 at $25.36 an ounce.

The highlight of the U.S. trading day will be the presidential inauguration of Democrat Joe Biden. Look for Biden to hit the ground running by reversing many of outgoing President Trump’s executive orders. Biden and his Democrat-controlled Congress are also set to roll out big spending plans that could further lay the seeds for problematic price inflation down the road. Incoming U.S. Treasury Secretary Janet Yellen on Tuesday told lawmakers that going “big” on spending is needed to begin to repair the severe economic damage caused by the pandemic.

Global stock markets were mixed but mostly higher overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Aside from the inauguration, it’s a big corporate earnings week in the stock market.

In overnight news, the Euro zone December consumer price index came in at up 0.3% from November and down 0.3%, year-on-year. Those numbers are not anywhere close to suggesting rising inflation, and even hint that deflation may become the problem.

The key “outside markets” today see the U.S. dollar index slightly lower as bulls are fading this week following the recent good rebound from a 2.5-year low scored earlier this month. Meantime, Nymex crude oil futures prices are higher, trading around $53.50 a barrel and near a 10-month high. The yield on the benchmark 10-year U.S. Treasury note stands at 1.12%.

U.S. economic data due for release Wednesday is light and includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the NAHB housing market index.

Live 24 hours gold chart [Kitco Inc.]

Technically, the February gold futures bulls and bears are on a level overall near-term technical playing field. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at $1,900.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,767.20. First resistance is seen at the overnight high of $1,856.80 and then at last week’s high of $1,864.00. First support is seen at the overnight low of $1,838.70 and then at $1,825.00. Wyckoff's Market Rating: 5.0.

Live 24 hours silver chart [ Kitco Inc. ]

March silver futures bulls and bears are on a level overall near-term technical playing field. Silver bulls' next upside price objective is closing prices above solid technical resistance at the January high of $28.105 an ounce. The next downside price objective for the bears is closing prices below solid support at the November low of $21.96. First resistance is seen at the overnight high of $25.63 and then at $26.00. Next support is seen at the overnight low of $25.24 and then at $25.00. Wyckoff's Market Rating: 5.0.
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