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Gold, silver see price rallies ahead of Powell Speech

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(Kitco News) - Gold and silver futures prices are higher and have hit fresh daily highs in early U.S. trading Wednesday. The two precious metals markets have stabilized so far this week, but traders are still looking for the next catalyst to break prices out of their near-term trading ranges. April gold futures were last up $17.00 at $1,854.60 and March Comex silver was last up $0.168 at $27.555 an ounce.

Global stock markets were mostly higher overnight. China’s Shanghai stock index hit a 5.5-year high, on the last day of trading before the Chinese Lunar New Year holiday begins. U.S. stock indexes are pointed toward higher openings and record highs when the New York day session begins. Upbeat trader and investor attitudes this week continue to drive share prices up, which has also constrained the safe-haven metals bulls. New Covid-19 cases and hospitalizations in the U.S. are declining, vaccinations are ramping up, and the U.S. Congress is likely to pass a big financial stimulus package for Americans by the time spring arrives. Corporate earnings reports have also been generally positive lately.

The U.S. data point of the day at mid-week is the consumer price index for January, which came in at up 0.3% from December and up 1.4%, year-on-year. Those numbers were in line with market expectations. Despite the “reflation trade” being in favor in the marketplace at present, data from most major economies does not show inflation numbers even close to being problematic.

Another U.S. marketplace feature Wednesday is Fed Chairman Jerome Powell’s speech to the Economic Club of New York at 2:00 p.m. eastern time. His comments will be closely scrutinized for clues on the future direction of U.S. monetary policy.

The key “outside markets” today see the U.S. dollar index trading slightly lower. Meantime, Nymex crude oil futures prices are higher and hit another 13-month high overnight, and are trading around $58.70 a barrel. The benchmark 10-year U.S. Treasury note yield is currently fetching 1.16%.

U.S. economic data due for release Wednesday includes weekly MBA mortgage applications survey, the consumer price index, real earnings, the monthly Treasury budget statement and the weekly DOE liquid energy stocks report.

Live 24 hours gold chart [Kitco Inc.]

Technically, the February gold futures bears have the slight overall near-term technical advantage amid a four-week-old price downtrend still in place on the daily chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at $1,878.80. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,771.30. First resistance is seen at $1,865.00 and then at $1,878.80. First support is seen at today’s low of $1,834.00 and then at $1,821.30. Wyckoff's Market Rating: 4.5

Live 24 hours silver chart [ Kitco Inc. ]

March silver futures bulls have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the February high of $30.35 an ounce. The next downside price objective for the bears is closing prices below solid support at $25.00. First resistance is seen at this week’s high of $27.875 and then at $28.00. Next support is seen at Tuesday’s low of $27.13 and then at $27.00. Wyckoff's Market Rating: 6.0.

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.