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Price pressure on gold, silver ahead of U.S. inflation data, FOMC

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Welcome to Kitco News' 2022 outlook series. The new year will be filled with uncertainty as the Federal Reserve looks to pivot and tighten its monetary policies. At the same time, the inflation threat continues to grow, which means real rates will remain in low to negative territory. Stay tuned to Kitco News to learn from the experts on how to navigate turbulent financial markets in 2022.

(Kitco News) - Gold and silver prices are modestly lower in early U.S. trading Tuesday. There is some keener risk appetite in the marketplace recently and that's a negative for the safe-haven metals. Focus Tuesday is on the latest U.S. inflation report and on the Federal Reserve's monetary policy meeting. February gold was last down $4.50 at $1,783.90 and March Comex silver was last down $0.218 at $22.11 an ounce.

All of the major central banks hold monetary policy meetings this week. The Federal Reserve's FOMC meeting begins Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chairman Jerome Powell. The FOMC is expected to announce the acceleration of asset purchases tapering as the U.S. now has the hottest inflation in nearly 40 years.

Speaking of inflation, traders will closely examine today's U.S. producer price index report for November, which is expected to come in at up 0.5% from October.

Global stock markets were mixed in overnight trading, with European shares mostly up and Asian shares mostly down. U.S. stock indexes are also pointed toward weaker openings when the New York day session begins.


Longer-term charts neutral-bullish for gold, but bulls have a potential ace

The key "outside markets" today see Nymex crude oil prices slightly lower and trading around $71.00 a barrel. The U.S. dollar index is weaker early today. Meantime, the yield on the U.S. Treasury 10-year note is presently fetching 1.434%.

U.S. economic data due for release Tuesday includes the NFIB small business index, the weekly chain store sales index and Johnson Redbook retail sales reports, and the producer price index.

Live 24 hours gold chart [Kitco Inc.]

Technically, February gold futures bulls have the slight overall near-term technical advantage, but trading has been sideways and choppy for two weeks. Bulls' next upside price objective is to produce a close above solid resistance at $1,800.00. 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 last week's high of $1,794.30 and then at $1,800.00. First support is seen at $1,775.00 and then at last week's low of $1,770.40. Wyckoff's Market Rating: 5.5

Live 24 hours silver chart [ Kitco Inc. ]

The March silver bears have the firm overall near-term technical advantage. Prices hit a nine-week low Friday. Prices have been trending down for four weeks. Silver bulls' next upside price objective is closing December futures prices above solid technical resistance at $23.00 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 this week's high of $22.43 and then at last week's high of $22.635. Next support is seen at $22.00 and then at last week's low of $21.815. Wyckoff's Market Rating: 2.0.

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.