Price advances for gold, silver amid bullish outside forces
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 moderately up in early U.S. action Tuesday, supported by positive daily outside markets that include higher crude oil prices, a weaker U.S. dollar index and a slight drop in U.S. Treasury yields. February gold futures were last up $9.40 at $1,808.10 and March Comex silver was last up $0.233 at $22.69 an ounce.
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Traders and investors are more cautious this week, trying to adjust to a marketplace of tighter central bank monetary policies in 2022, amid rising inflation.
Federal Reserve Chairman Jerome Powell is scheduled to testify to a Senate banking committee today, regarding his nomination for a second term as Fed chair. He will surely be asked questions about the trajectory of Fed monetary policy and inflation prospects.
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.
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The key "outside markets" today see Nymex crude oil futures prices higher and trading around $79.35 a barrel. The U.S. dollar index is weaker early 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%.
U.S. economic data due for release Tuesday is light and includes the weekly Johnson Redbook and chain store sales reports, the NFIB small business optimism index, and the IDB/TIPP economic optimism index.
Technically, the February gold futures bulls have the slight overall near-term technical advantage. Bulls' next upside price objective is to produce a close in February futures 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 $1,815.00 and then at $1,825.00. First support is seen at $1,800.00 and then at Monday'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 the December high of $23.48 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 $22.85 and then at $23.00. Next support is seen at Monday's low of $22.205 and then at $22.00. Wyckoff's Market Rating: 2.5.