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Modest price advances in gold, silver amid weaker USDX

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(Kitco News) - Gold and silver prices are are a bit higher in early U.S. trading Wednesday, supported by a modest decline in the U.S. dollar index at mid-week. Gains in the precious metals are being limited by slumping crude oil prices this week and rising U.S. Treasury yields today. February gold was last up $3.00 at $1,785.50 and March silver was up $0.20 at $22.525.

Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. The U.S. stock index bulls are fading fast this week and near-term price uptrends on the daily bar charts have been negated.

In overnight news, following recent public protests, China has announced sweeping revisions to its strict Covid measures that ultimately failed. The new guidelines keep some restrictions in place but largely scrap the health code that has been mandatory for entering most public places and roll back mass testing. Health experts now say China is underprepared for the surge in cases it could now see. Beijing has fallen short on preparations like bolstering the elderly vaccination rate, increasing surge and intensive care capacity in hospitals, and stockpiling antiviral medications.

Meantime, China's trade surplus declined to $69.84 billion in November from $71.7 billion in the same month last year. That’s far below market forecasts of a surplus of $78.1 billion. This was the smallest trade surplus since April, due to weakening global and domestic demand. China’s exports slumped 8.7%, year over year, the second straight month of decline, amid weakening overseas demand due to high inflation and supply disruptions. Imports fell at a faster 10.6%, the second straight month of decrease as domestic demand weakened amid widespread Covid curbs.


This 'trigger point' caused the protests in China - Pyotr Kurzin

In other overnight news, the Euro zone gross domestic product in the third quarter was revised to up 2.3%, year-on-year, compared to the last estimate of up 2.1%. The revised number was slightly better than expected.

The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are near steady trading around $74.25 a barrel. Prices overnight hit an 11-month low. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently 3.535%.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, revised productivity and costs, consumer credit and the weekly DOE liquid energy stocks report.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold futures bulls have the overall near-term technical advantage. Prices are in a four-week-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at the August high of $1,836.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,750.00. First resistance is seen at Tuesday’s high of $1,793.20 and then at $1,800.00. First support is seen at this week’s low of $1,778.10 and then at $1,770.00. Wyckoff's Market Rating: 6.5

Live 24 hours silver chart [ Kitco Inc. ]

The silver bulls have the 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 $24.00. The next downside price objective for the bears is closing prices below solid support at $20.79. First resistance is seen at Tuesday’s high of $22.78 and then at $23.00. Next support is seen at this week’s low of $22.19 and then at $22.00. Wyckoff's Market Rating: 6.5.

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.