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Gold price powers to 9-month high

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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 prices are higher and scored a nine-month peak in early U.S. trading Tuesday. Fully positive charts and some safe-haven demand are providing fuel for the bullish fire in the yellow metal. The path of least resistance for prices remains sideways to higher, with no early technical clues that a market top is close at hand. February gold was last up $8.10 at $1,936.60 and March silver was up $0.196 at $23.75.

The recent depreciation in the U.S. dollar on the foreign exchange market is partly responsible for gold's surge. However, longtime market watchers are wondering if metals traders sense the geopolitical landscape will significantly heat up in the coming months. An interesting news headline this morning from Barron's: "A summer of sovereign debt crises could be coming. Is the Fed ready?" Meantime, a headline from the Wall Street Journal today reads: "Hopes for a markets recovery hinge on big drop in inflation." In other words, if inflation heats back up again, the general marketplace would be in big trouble. Maybe gold traders are sensing that scenario may occur, too.

Global stock markets were mixed overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins.

Hedge funds add to their bullish gold bets, but rally appears to be losing some steam

In overnight news, the Euro zone got some upbeat economic data as its composite purchasing managers index (PMI) rose to 50.2 in January from 49.3 in December and beating market expectations.

The key outside markets today see the U.S. dollar index near steady. Nymex crude oil futures prices are firmer and trading around $82.00 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.5%.   

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store sales indexes, the U.S. flash and services purchasing managers indexes (PMIs), and the Richmond Fed business survey.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold futures bulls have the solid overall near-term technical advantage. Prices are in a 2.5-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 $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,885.00. First resistance is seen at the overnight high of $1,943.80 and then at $1,950.00. First support is seen at $1,925.00 and then at this week's low of $1,912.50. Wyckoff's Market Rating: 8.5

Live 24 hours silver chart [ Kitco Inc. ]

The silver bulls have the slight overall near-term technical advantage. However, trading has been sideways and choppy and a price uptrend on the daily chart has been negated. Silver bulls' next upside price objective is closing March futures prices above solid technical resistance at the January high of $24.775. The next downside price objective for the bears is closing prices below solid support at $22.00. First resistance is seen at $24.00 and then at this week's high of $24.295. Next support is seen at the overnight low of $23.48 and then at $23.26. Wyckoff's Market Rating: 5.5.

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.