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Gold price hits 6.5-mo. high on bullish charts, China hopes

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Welcome to Kitco News' 2023 Outlook Series. Uncertainty continues to dominate financial markets as central bank monetary policies push the global economy into a recession to cool down inflation. Stay tuned to Kitco News to learn from the experts on how to navigate turbulent financial markets in 2023.

(Kitco News) - Gold and silver prices are higher in early U.S. trading Wednesday, with gold scoring a 6.5-month peak. Bullish technical postures for the metals continue to invite the chart-based speculators to the long sides of the metals. Meantime, ideas of better economic growth in China are supporting metals prices on notions of increased demand. February gold was last up $4.50 at $1,880.60 and March silver was up $0.25 at $23.915.

Global stock markets were mixed overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. Trader and investor risk appetite is not robust early in the new year, amid most major central banks that are still-hawkish on their monetary policies. However, risk aversion is not keen, either, due to hopes China’s economy, the second-largest in the world, will see improved growth after the Chinese government relaxed Covid restrictions.

In overnight news, it appears most of the U.S. airline industry has seen its flights suspended due to a computer malfunction of unknown nature. The first thing that comes to many market watchers’ minds is a major cyber attack from a foreign country that could prompt a retaliation from the U.S.

The key outside markets today see the U.S. dollar index higher on a corrective bounce prices Monday hit a 6.5-month low. Nymex crude oil futures prices are modestly up and trading around $75.50 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.574%.  

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Traders are awaiting the next major U.S. inflation data point: Thursday’s consumer price index report for December. The CPI headline number is expected to come in at up 6.5%, year-on-year, which compares to the 7.1% rise reported in the November report.

U.S. economic data due for release Wednesday is light and includes the weekly MBA mortgage applications survey, the weekly DOE liquid energy stocks report.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold futures bulls have the solid overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at $1,900.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at today’s high of $1,890.00 and then at $1,900.00. First support is seen at this week’s low of $1,869.30 and then at $1,850.00. Wyckoff's Market Rating: 8.0.

Live 24 hours silver chart [ Kitco Inc. ]

The silver bulls have the firm overall near-term technical advantage. A choppy, four-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 $25.00. The next downside price objective for the bears is closing prices below solid support at $22.00. First resistance is seen at this week’s high of $24.285 and then at the January high of $24.775. Next support is seen at this week’s low of $23.55 and then at the January low of $23.26. 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.