Gold price gains on weaker USDX, higher crude oil
(Kitco News) - Gold and silver prices are higher in early U.S. trading Tuesday. Once again, precious metals are taking their daily trading cues from the key "outside markets—the U.S. dollar index and crude oil. Today, those markets are in a bullish posture for gold and silver as the USDX is lower and crude oil prices are higher. February gold was last up $14.80 at $1,770.10 and March silver was up $0.33 at $21.45.
Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Traders and investors are still very closely monitoring the civil unrest situation in China. Some market watchers, including metals traders, are deeming the recent unrest as bullish for stocks and commodities because it will likely force China to back off on its strict Covid lockdowns that have crimped the worlds second-largest economy. Reports said new Covid cases in China are decelerating a bit. It was calmer in Chinese streets Tuesday evening, with no major protesting reported in the media. Reports said Chinese authorities deployed a heavy police presence in major cities to deter a repeat of the weekend demonstrations. Respected authority on China, Bill Bishop of Sinocism, said the government "has a playbook for dealing with these kinds of events and has been hardening the system for many years for just these kinds of threats. He said the Chinese government will be "pushing harder on propaganda work, censorship and political thought work. And ‘hostile foreign forces will be blamed. Bishop added, "For all the stability maintenance work Beijing has done they really would have a hard time dealing with tens or hundreds of thousands or more people on the streets in one or more cities. I am not expecting anything like that to happen, but you cant rule it out, and I will bet the security services are not ruling it out.
Other big market events this week include a speech by Federal Reserve Chairman Jerome Powell on Wednesday afternoon and the U.S. employment report from the Labor Department on Friday morning.
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The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are solidly higher on a strong rebound after hitting an 11-month early Monday, and are trading around $79.50 a barrel. There are reports OPEC at its meeting next week will consider cutting the cartels collective crude oil production. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently 3.652%.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook retail sales report, the monthly and quarterly U.S. house price indexes, the S&P CoreLogic/Case-Shiller home price indexes, and the consumer confidence index.
Technically, the 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 November high of $1,806.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,700.00. First resistance is seen at this weeks high of $1,778.50 and then at $1,790.00. First support is seen at the overnight low of $1,752.90 and then at $1,740.00. Wyckoff's Market Rating: 5.5
The silver bulls have the overall near-term technical advantage. A choppy, 2.5-month-old uptrend is still in place on the daily bar chart. Silver bulls' next upside price objective is closing March futures prices above solid technical resistance at the November high of $22.50. The next downside price objective for the bears is closing prices below solid support at $19.00. First resistance is seen at last weeks high of $21.88 and then at $22.00. Next support is seen at $21.00 and then at $20.79. Wyckoff's Market Rating: 6.0.