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Short covering, bargain buying boost gold

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(Kitco News) - Gold futures prices are sharply higher in midday U.S. trading Monday and have rebounded after hitting an eight-month low Friday. Short covering from the futures traders and bargain hunting in the cash market are featured to start the trading week. Outside market elements are also working in favor of the gold market bulls today--a weaker U.S. dollar index and firmer crude oil prices. April gold futures were last up $31.00 at $1,808.40 and March Comex silver was last up $0.781 at $28.035 an ounce.

Global stock markets were mostly weaker overnight. U.S. stock indexes are mixed at midday. The stock market traders are taking note of the competing asset class of government bonds, as the 10-year U.S. Treasury note yield is currently fetching 1.369%, a one-year high. Still, one stock market analyst said U.S. T-Note yields would have to rise to around 4% to become competitive with the U.S. technology stock sector, on a return on investment basis. And overall trader and investor risk sentiment remains low, as the U.S. government is set to roll out a new, big financial stimulus package for Americans. Also, Covid-19 infections are on the decline while vaccines are continuing to ramp up.

Inflation concerns in the marketplace are on the rise. Broker SP Angel said Monday morning in an email dispatch: “As the U.S., China, EU, U.K. and beyond all look to roll out their own packages of environmental initiatives, the post-crisis consumption of industrial metals is widely expected to outstrip near-term and medium-term supply. Inflation expectations have also helped base metals, with copper prices rising 18% for every 1% in consumer prices since 1992. Goldman Sachs reported last week the copper market is facing the largest deficit in a decade this year, with a high risk of scarcity over the coming months.” Many raw commodity futures market prices are trending up at present.

The marketplace is looking ahead to Federal Reserve Chairman Jay Powell’s testimony on U.S. monetary policy to the Senate Banking Committee on Tuesday.

The key “outside markets” today sees Nymex crude oil futures prices are solidly up and trading around $61.00 a barrel. The U.S. dollar index is weaker amid recent choppy trading.

Live 24 hours gold chart [Kitco Inc.]

Technically, April gold futures bears still have the firm overall near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,850.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at last week’s low of $1,759.00. First resistance is seen at today’s high of $1,812.40 and then at $1,820.00. First support is seen at $1,800.00 and then at today’s low of $1,778.60. Wyckoff's Market Rating: 3.5

Live 24 hours silver chart [ Kitco Inc. ]

March silver futures prices hit a three-week high today. The silver bulls have the overall near-term technical advantage amid a four-week-old price uptrend in place on the daily chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the February high of $30.25 an ounce. The next downside price objective for the bears is closing prices below solid support at $26.00. First resistance is seen at $28.25 and then at $28.50. Next support is seen at the overnight low of $27.33 and then at $27.00. Wyckoff's Market Rating: 6.5.

March N.Y. copper closed up 625 points at 413.70 cents today. Prices closed near mid-range today and hit a contract and nine-year high. The copper bulls have the strong overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 426.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 380.00 cents. First resistance is seen at today’s contract high of 321.60 cents and then at 425.00 cents. First support is seen at today’s low of 406.65 cents and then at 400.00 cents. Wyckoff's Market Rating: 10.0.

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.