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Gold, silver see modest price gains; markets less spooked

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(Kitco News) - Gold and silver prices are firmer in early U.S. trading Monday, on some safe-haven demand and short covering by futures traders as the market place is not as panicky as seen on Friday, but by no means upbeat, either. February gold was last up $6.00 at $1,794.00 and March Comex silver was last up $0.11 at $23.25 an ounce.

The marketplace is a little less spooked about the new Omicron strain of Covid than it was Friday, but by no means can trader and investors attitudes be termed upbeat to start the trading week. Reports now say the Omicron strain may be more mild than the previous ones, and that vaccines are likely to work on the new variant but may need tweaking. Still, right now there are more questions than answers on the matter and that's likely to keep market participants on edge for at least the near term. That's bullish for safe-haven assets like gold, the U.S. dollar and U.S. Treasuries. Some countries have closed their borders to foreigners, even though the World Health Organization says that's premature. More than a few market watchers say the Omicron scare is overblown and markets are likely to settle down quickly.

Global stock markets were mixed in overnight trading, with Asian shares mostly lower and European shares mostly higher. The U.S. stock indexes are pointed to solidly higher openings when the New York day session begins, after suffering sharp losses Friday.

The general sell off in the raw commodity futures markets Friday, led by crude oil, has some wondering if the inflation scare has peaked. It's really too early to suggest such. How the commodity markets trade this week will provide better clues. Good rebounds in the commodity markets this week, including crude oil, would point to inflation remaining elevated and even problematic.


Gold price technical analysis and what levels to watch

The key "outside markets" see Nymex crude oil prices sharply higher and trading around $71.75 a barrel, on a rebound after Friday plunging to a nearly two-month low of $67.40. The U.S. dollar index is slightly up. Meantime, The yield on the U.S. Treasury 10-year note is presently fetching 1.521%.

U.S. economic data due for release Monday includes pending home sales and the Texas manufacturing outlook survey.

Live 24 hours gold chart [Kitco Inc.]

Technically, February gold futures bulls have the slight overall near-term technical advantage. A two-month-old uptrend on the daily bar chart is still alive, but just barely. Bulls' next upside price objective is to produce a close above solid resistance at last week's high of $1,853.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,761.00. First resistance is seen at the overnight high of $1,801.50 and then at $1,810.00. First support is seen at last week's low of $1,780.20 and then at $1.775.00. Wyckoff's Market Rating: 5.5

Live 24 hours silver chart [ Kitco Inc. ]

The March silver bears have the overall near-term technical advantage. A seven-week-old uptrend on the daily bar chart has been negated. Silver bulls' next upside price objective is closing December futures prices above solid technical resistance at $25.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the September low of $21.46. First resistance is seen at Friday's high of $23.77 and then at $24.00. Next support is seen at last week's low of $22.935 and then at $23.40. Wyckoff's Market Rating: 3.0.

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.