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Downside price action in gold, silver, amid stronger greenback

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(Kitco News) Gold and silver futures prices are lower in early U.S. trading Wednesday, pressured in part by a higher U.S. dollar index on this day. Shorter-term futures traders are exerting more pressure on gold and silver at mid-week, amid a lack of fresh, bullish news for the metals recently. February gold futures were last down $12.20 at $1,838.70 and March Comex silver was last down $0.368 at $25.17 an ounce.

Global stock markets were flat to mixed overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. If the stock indexes continue to sell off today, gold and silver could see some safe-haven demand surface. More and more market watchers are reckoning the U.S. stock market has become very frothy, what with an economy that is awash in easy money from the Federal Reserve.

It’s a busy week for U.S. economic data, highlighted by the Federal Reserve’s two-day Open Market Committee (FOMC) meeting that began Tuesday morning and ends Wednesday afternoon with a statement and Fed Chairman Powell’s press conference. Markets could become more active in the afternoon trade, following the FOMC statement’s release at 2:00 p.m. EDT. Fed Chairman Powell does have a history of making unexpected remarks during his press conference that have rattled markets.

Possibly flying just under the radar of the marketplace at present is talk among some traders and brokers that China is experiencing a serious food shortage. China has been making bigger purchases of U.S. grains lately, as part of a previous trade agreement between the two largest economies in the world. Also, there are some reports that Covid-19 is making a resurgence in some locations in China. All of the above could impact China’s economic growth prospects. Of course, the China government’s secretive nature makes anything of this nature hard to confirm, but it bears keeping a closer eye upon.

The key “outside markets” today see the U.S. dollar index solidly higher. Meantime, Nymex crude oil futures prices are near steady and trading around $52.65 a barrel. The yield on the benchmark 10-year U.S. Treasury note stands at 1.04%.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, durable goods orders, the FOMC statement and the weekly DOE liquid energy stocks report.

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 January low of $1,800.80. First resistance is seen at the overnight high of $1,851.50 and then at Tuesday’s high of $1,860.80. First support is seen at $1,830.00 and then at $1,825.00. Wyckoff's Market Rating: 5.0

Live 24 hours gold chart [Kitco Inc.]

March silver futures bulls and bears are back 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 January low of $24.04. First resistance is seen at the overnight high of $25.545 and then at Tuesday’s high of $25.72. Next support is seen at $25.00 and then at $24.50. Wyckoff's Market Rating: 5.0.

Live 24 hours silver chart [ Kitco Inc. ]

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.