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Solid Price gains for gold, silver following Dovish Powell

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(Kitco News) - Gold and silver prices are sharply higher in early U.S. trading Thursday, with silver scoring a six-month high. A dovish lean by the U.S. central bank is fueling the metals markets bulls today. February gold was last up $37.80 at $1,797.80 and March silver was up $0.614 at $22.395.

The marketplace deemed Federal Reserve Chairman Jerome Powell's highly anticipated speech at the Brookings Institution Wednesday afternoon as leaning dovish on U.S. monetary policy. That rallied the U.S. stock market, pressured the U.S. dollar index and dropped U.S. Treasury yields. Gold and silver prices rallied in the aftermath of Powell's remarks. He said the U.S. central bank could slow the pace of monetary policy tightening as soon as the FOMC meeting in two weeks. However, Powell said the Fed will need to hold policy at restrictive levels "for some time." Powell added that inflation remains far too high and that future rate hikes are warranted.

Global stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins, following strong gains posted Wednesday afternoon. The Dow Jones Industrial Average has exited the bear market and has entered a new bull market, according to Dow Jones Newswires reports. The DJIA has risen 20% from its recent low. However, the S&P 500 stock index is still on track for its worst year since 2008.

Traders continue to monitor the civil unrest in China. It seems the situation is not spiraling out of control, but neither is it fading away. Reports say China is relaxing some its Covid lockdowns (likely due to the public protests), while at the same time China says new Covid infections are declining and vaccinations are on the rise.

The key outside markets today see the U.S. dollar index solidly lower. Nymex crude oil prices are higher and trading around $81.25 a barrel. Both of these markets are in a bullish daily posture for the metals. There have been some reports OPEC at its meeting early next week will consider cutting its collective crude oil production. Other reports say the cartel will leave its production unchanged. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently 3.614%.

Gold has a path to $2,000 and silver to $25 in the second half of 2023 - Bank of America

Focus is turning to Friday morning's U.S. employment situation report for November. The key non-farm payrolls figure is expected to come in at up 200,000, compared to the rise of 261,000 seen in the October report.

It's another busy U.S. economic data release day Thursday, including the weekly jobless claims report, the Challenger job-cuts report, personal income and outlays, the U.S. manufacturing PMI, the ISM report on business manufacturing, construction spending, the global manufacturing PMI, monthly chain store sales, and domestic auto industry sales.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold futures bulls have the 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 $1,750.00. First resistance is seen at $1,800.00 and then at $1,806.00. First support is seen at the overnight low of $1,782.90 and then at $1,770.00. Wyckoff's Market Rating: 6.5

Live 24 hours silver chart [ Kitco Inc. ]

The silver bulls have the firm overall near-term technical advantage. A choppy, three-month-old uptrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing March futures prices above solid technical resistance at $23.00. The next downside price objective for the bears is closing prices below solid support at $21.00. First resistance is seen at today's high of $22.64 and then at $23.00. Next support is seen at $22.00 and then at $21.50. Wyckoff's Market Rating: 7.0.

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.