Gold sees price pause ahead of Powell testimony
(Kitco News) - Gold futures prices are trading not far from unchanged in early U.S. trading Tuesday and are pausing after good gains Monday and ahead of what is likely the markets event of the week: Federal Reserve Chairman Jerome Powell’s remarks to U.S. lawmakers. Wobbly U.S. stock indexes and a weaker U.S. dollar index early this week, combined with rallying crude oil prices, appear to have at least put a floor under the gold and silver markets. April gold futures were last up $1.80 at $1,809.90 and March Comex silver was last down $0.095 at $27.97 an ounce.
The marketplace is looking forward to Powell’s testimony on U.S. monetary policy to the Senate Banking Committee on Tuesday morning. The marketplace will be especially keen to hear what Powell has to say about rising U.S. Treasury yields and the prospects for rising inflation. The stock market has turned wobbly early this week due in part to worries about rising bond yields starting to pull away investor money from the stock market. A Barron’s story today was headlined, “The Reflation Trade is Well Underway. How Long Can Investors Keep Smiling?” Still, the U.S. stock indexes are not that far down from their recent record highs and trader and investor attitudes are still generally upbeat.
Global stock markets were mixed overnight, with Asian shares mostly up and European shares mostly down. U.S. stock indexes are pointed toward mixed openings when the New York day session begins.
In other overnight news, the price of Bitcoin is getting hammered early this week and has dropped close to 15% from the record high seen over the weekend. If the declines in Bitcoin continue it could put a floor under the competing asset class, gold and silver markets.
The key “outside markets” today sees Nymex crude oil futures prices slightly up, hitting a 13-month high and trading around $62.00 a barrel. The U.S. dollar index is weaker firmer early today but the bulls have faded recently. The yield on the U.S. 10-year Treasury note is presently fetching 1.37%.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the monthly house price index, the S&P Core-Logic home indexes, the Richmond Fed business survey, and the consumer confidence index.
Technically, the February gold futures bears have the overall near-term technical advantage amid a six-week-old price downtrend in place on the daily chart. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at $1,856.60. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the February low of $1,759.00. First resistance is seen at the overnight high of $1,815.20 and then at $1,820.00. First support is seen at the overnight low of $1,802.30 and then at $1,800.00. Wyckoff's Market Rating: 3.5
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 today’s high of $28.425 and then at $28.50. Next support is seen at this week’s low of $27.33 and then at $27.00. Wyckoff's Market Rating: 6.5.