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Gold sees price gains on upside correction from recent pressure

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(Kitco News) - Gold futures prices are moderately higher in early U.S. trading Thursday, on a normal upside price correction in a downtrend and on some perceived bargain buying after the metal hit a 2.5-month low on Wednesday. Silver prices are slightly down but that market has not been hit as hard as gold recently. April gold futures were last up $10.10 at $1,782.90 and March Comex silver was last down $0.07 at $27.265 an ounce.

Global stock markets were mixed but mostly weaker overnight. Mainland China markets were open Thursday after being closed several days for the Lunar New Year holiday. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. There is still scant risk aversion in the marketplace at present and that’s bullish for equities.

However, rising government bond yields are a focus of the marketplace this week and that competing asset does have the  stock market bulls a bit worried. The U.S. Treasury 10-year note reached its highest yield in a year earlier this week and is currently fetching 1.282%. If U.S. Treasury yields continue to rise, investors would be more inclined lock in those higher returns. For perspective, the German 10-year bond (bund) yield stands at -0.359% and the U.K. bond (gilt) yield is 0.585%.

Copper futures prices hit a nine-year high Thursday, as the red industrial metal is surging on ideas of strong demand in the coming months as major economies shift into high gear with the pandemic likely tamped down.

The key “outside markets” today see the U.S. dollar index trading lower. Meantime, Nymex crude oil futures prices are slightly lower and trading around $61.00 a barrel. Bloomberg today reported, “With millions of Texans in the dark for a fourth day after the unusually cold weather caused widespread blackouts, the fallout for energy markets is becoming a worldwide problem. Almost 40% of U.S. crude production is now offline, helping push the global benchmark Brent price above $65 a barrel in Asia trading. While temperatures are forecast to rise this weekend, it could take weeks for production to be fully restored as operators need to assess wells for damage.”

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, the new house price index, new residential construction and building permits, import and export prices, and the weekly DOE liquid energy stocks report.

Live 24 hours gold chart [Kitco Inc.]

Technically, the February gold futures bears have the firm overall near-term technical advantage amid a five-week-old price downtrend in place on the daily chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at $1,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,750.00. First resistance is seen at the overnight high of $1,788.10 and then at Wednesday’s high of $1,794.20. First support is seen at the overnight low of $1,775.10 and then at this week’s low of $1,767.90. Wyckoff's Market Rating: 3.0

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 $26.00. First resistance is seen at the overnight high of $27.595 and then at $28.00. Next support is seen at $27.00 and then at last week’s low of $26.75. Wyckoff's Market Rating: 6.5.

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.