Gold, silver up as crude oil spikes up, USDX sells off
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 futures prices are solidly higher in midday U.S. action Tuesday, boosted by positive daily outside markets that include sharply higher crude oil prices, a lower U.S. dollar index and a slight drop in U.S. Treasury yields. February gold futures were last up $17.90 at $1,816.90 and March Comex silver was last up $0.323 at $22.785 an ounce.
Federal Reserve Chairman Jerome Powell testified to a Senate banking committee today, regarding his nomination for a second term as Fed chair. He was asked questions about Fed monetary policy and inflation prospects. Powell revealed insight that was not much different than that proffered by the Fed recently. What may have helped lift crude oil prices and in turn helped rally the precious metals is that Powell was very upbeat on U.S. economic growth prospects. Also, Powell did not sound any more hawkish than what the marketplace has seen from the Fed recently.
Global stock markets were mixed overnight. U.S. stock indexes are higher at midday. Traders and investors are a bit more cautious this week, trying to adjust to a marketplace of tighter central bank monetary policies in 2022, amid rising inflation.
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The U.S. data point of the week will be Wednesday's consumer price index report for December, which is expected to come in at up 7.1%, year-on-year.
The key "outside markets" today see Nymex crude oil futures prices sharply higher, hitting a two-month high and trading around $81.35 a barrel. The U.S. dollar index is lower at midday today. The yield on the U.S. 10-year Treasury note is presently fetching 1.74%, which is down a bit from Monday's pandemic high of just above 1.8%.
Technically, February gold futures bulls have gained the slight overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at the January high of $1,833.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the December low of $1,753.00. First resistance is seen at $1,825.00 and then at $1,833.00. First support is seen at $1,800.30 and then at this week's low of $1,789.30. Wyckoff's Market Rating: 5.5
March silver futures bears have the firm overall near-term technical advantage. 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 December low of $21.41. First resistance is seen at $23.00 and then at the December high of $23.48. Next support is seen at this week's low of $22.205 and then at the January low of $21.945. Wyckoff's Market Rating: 2.5.
March N.Y. copper closed up 770 points at 442.85 cents today. Prices closed near the session high today. The copper bulls have the slight overall near-term technical advantage. 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 420.00 cents. First resistance is seen at the January high of 448.05 cents and then at 451.15 cents. First support is seen at today's low of 436.60 cents and then at the January low of 431.35 cents. Wyckoff's Market Rating: 5.5.