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Gold can't catch safe-haven bid, beholden to crude's big drop

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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 lower in midday U.S. trading Monday, as the safe-haven metals were unable to benefit from a risk-off trader and investor mentality in the marketplace to start the holiday-shortened trading week. A big drop in crude oil prices today apparently trumped the safe-haven trade in the metals. February gold was last down $9.90 at $1,795.00 and March Comex silver was last down $0.213 at $22.325 an ounce.

U.S. stock indexes are solidly lower at midday. The coronavirus pandemic just won't go away and is raging in several European countries, which is causing fresh business and travel restrictions. The Omicron strain is also surging in parts of the U.S. right as the holiday season approaches. Global stock markets were mostly lower in overnight trading.

Also a negative for the U.S. stock indexes is the blockage of the Biden administration's $1.7 trillion Build Back Better spending program by Sen. Joe Manchin. Many analysts are saying Biden's big plan is dead in the water now—dealing a huge blow to Biden. Some economists are already dialing back U.S. economic growth projections for 2022.


Unpredictable silver market extra challenging for traders, investors

Pressuring Asian shares overnight is news that another China property firm is in trouble. Reports said the Kaisa firm has announced it defaulted on several U.S. dollar-denominated bonds. The developer is in discussions with creditors regarding a restructuring plan. The bigger troubled China property developer, Evergrande, has had two land parcels in Chengdu reclaimed by local government without compensation, said reports. The Asian markets got little help from China's central bank cutting its one-year loan prime rate, in a move to shore up the world's second-largest economy.

The key "outside markets" today see Nymex crude oil prices sharply lower on the pandemic worries, and trading around $67.20 a barrel. The U.S. dollar index is slightly lower early today. Meantime, the yield on the U.S. Treasury 10-year note is presently fetching 1.4%.

Live 24 hours gold chart [Kitco Inc.]

Technically, February gold futures prices saw a normal corrective pullback after recent good gains. Bulls still have the slight overall near-term technical advantage. 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 the December low of $1,753.00. First resistance is seen at today's high of $1,804.60 and then at the December high of $1,815.70. First support is seen at $1,785.00 and then at $1,775070. Wyckoff's Market Rating: 5.5

Live 24 hours silver chart [ Kitco Inc. ]

March silver futures bears have the firm overall near-term technical advantage. However, a four-week-old downtrend on the daily bar chart was negated late last week. Silver bulls' next upside price objective is closing 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 $21.00. First resistance is seen at the December high of $22.69 and then at $23.00. Next support is seen at $22.00 and then at the December low of $21.41. Wyckoff's Market Rating: 2.0.

March N.Y. copper closed up 55 points at 430.05 cents today. Prices closed nearer the session high today. The copper bears have the slight overall near-term technical advantage. Prices are in a two-month-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the November high of 451.15 cents. The next downside price objective for the bears is closing prices below solid technical support at the August low of 397.05 cents. First resistance is seen at last week's high of 433.30 cents and then at 438.00 cents. First support is seen at today's low of 423.20 cents and then at 420.00 cents. Wyckoff's Market Rating: 4.5.

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.