Gold up on weaker USDX, firmer crude oil, mild safe-haven buying
(Kitco News) - Gold prices are moderately higher in midday U.S. trading Wednesday. The key outside markets are in a daily bullish posture for the metals at mid-week, as the U.S. dollar index is a bit weaker and crude oil prices are up, but well down from their daily highs. There also remains a bit of safe-haven demand for the precious metal as there is still some uncertainty and anxiety in the marketplace. Silver prices could not catch a bid today and are solidly lower and hit a six-week low. February gold was last up $9.00 at $1,785.50 and March Comex silver was last down $0.38 at $22.435 an ounce.
Traders are still digesting Fed Chairman Jerome Powell remarks Tuesday that suggested a tighter U.S. monetary policy is necessary to keep rising inflation at bay and to keep supply chains moving along, especially if the new Omicron strain spreads rapidly worldwide. Powell also admitted that what the Fed had termed "transitory" inflation was incorrect and the central bank would abandon the term. Powell and Treasury Secretary Janet Yellen spoke in front of the U.S. House of Representatives today, but their remarks offered no new, market-sensitive insight.
What metals traders seemed most concerned about Tuesday was a tighter U.S. monetary policy halting rising inflation sooner rather than later. Remember that hard assets, including metals, have been a historical hedge against rising inflation. Importantly, the U.S. Treasury market Tuesday saw falling yields on the longer-dated maturities, which suggests bond market traders do indeed believe the Fed can successfully tamp down rising inflation in the coming months.
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Global stock markets were mostly higher in overnight trading. The U.S. stock indexes are solidly higher at midday. Trading has been choppy in the stock indexes this week, amid the new uncertainty about the Omicron coronavirus strain.
The key "outside markets" see Nymex crude oil prices modestly higher and trading around $66.60 a barrel, after hitting a three-month low of $64.43 on Tuesday. There is an OPEC meeting today that will be closely monitored. The U.S. dollar index is slightly lower. Meantime, The yield on the U.S. Treasury 10-year note is presently fetching around 1.47%.
Technically, February gold futures bulls and bears are on a level overall near-term technical playing field amid recent choppy trading. A two-month-old uptrend on the daily bar chart has stalled out. Bulls' next upside price objective is to produce a close above solid resistance at $1,840.00. 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 today's high of $1,795.70 and then at $1,800.00. First support is seen at $1,775.00 and then at this week's low of $1,771.20. Wyckoff's Market Rating: 5.0
March silver futures prices hit another six-week low today. The silver bears have the firm overall near-term technical advantage. Prices are trending lower again on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $24.00 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 $23.00 and then at this week's high of $23.46. Next support is seen at $22.25 and then at $22.00. Wyckoff's Market Rating: 2.5.
March N.Y. copper closed down 235 points at 425.65 cents today. Prices closed near the session low again today. The copper bears have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at this week's high of 451.15 cents. The next downside price objective for the bears is closing prices below solid technical support at the November low of 420.00 cents. First resistance is seen at 430.00 cents and then at today's high of 435.15 cents. First support is seen at this week's low of 425.05 cents and then at 420.00 cents. Wyckoff's Market Rating: 4.0.