More profit taking, corrective pullback action in gold, silver
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(Kitco News) - Gold and silver prices are weaker midday U.S. trading Wednesday, pressured by profit taking from the shorter-term futures traders and by a rebound in the U.S. dollar index today, as well as crude oil backing well down from its early-session high. February gold was last down $4.00 at $1,905.90 and March silver was down $0.458 at $23.615.
It was a very active day for U.S. economic data Wednesday, with highlights being a producer price index for January that came in tamer than expected, at up 6.2%, year-on-year. That was down from the revised 7.3% rise in the November report and well below the 11.7% rise in the March 2022 PPI report. Meantime, U.S. retail sales cooled in December, at down 1.1%, year-on-year. Gold and silver got a brief boost from those two reports, but then backed down from daily highs on the profit-taking pressure.
Global stock markets were mostly higher overnight. U.S. stock indexes are lower at midday.
In overnight news, the Japanese yen tumbled against the U.S. dollar as the Bank of Japan made a surprise move to keep its cap in the 10-year government bond yield at 0.5%. Many thought the BOJ would be hawkish and raise the cap. The BOJ move is an attempt to keep Japanese interest rates low, while global interest rates have been rising.
The Euro zone consumer price index for December came in at up 9.2%, year-on-year, which was in line with market expectations.
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The International Energy Agency said today that world oil demand will hit a record high this year as China’s economy is expected to see a jump in oil usage.
The key outside markets today see the U.S. dollar index lower. Nymex crude oil futures prices are higher and trading around $82.00 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.406%.
Technically, February gold futures bulls still have the solid overall near-term technical advantage. A 2.5-month-old uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,950.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,870.00. First resistance is seen at $1,925.00 and then at this week’s high of $1,931.80. First support is seen at today’s low of $1,898.60 and then at $1,885.00. Wyckoff's Market Rating: 8.0
March silver futures bulls have the overall near-term technical advantage. However, a four-month-old uptrend on the daily bar chart has turned into sideways trading. Silver bulls' next upside price objective is closing prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at $22.50. First resistance is seen at $24.00 and then at today’s high of $24.50. Next support is seen at the January low of $23.26 and then at $23.00. Wyckoff's Market Rating: 6.5.
March N.Y. copper closed down 55 points at 421.75 cents today. Prices closed near the session low today after hitting a 6.5-month high early on. The copper bulls have the solid overall near-term technical advantage. However, today’s low-range close suggests the bulls are short-term exhausted. A three-month-old uptrend is still in place on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 450.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 400.00 cents. First resistance is seen at 430.00 cents and then at today’s high of 435.50 cents. First support is seen at 415.00 cents and then at this week’s low of 411.05 cents. Wyckoff's Market Rating: 8.0.