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Price pressure on gold, silver amid profit taking

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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 weaker in early U.S. trading Wednesday, on some profit-taking from the shorter-term futures traders and as the key outside markets are in a mildly bearish posture for the precious metals: slightly lower crude oil prices and a slightly higher U.S. dollar index. Don’t be surprised to see the gold market bulls step in to buy the dip at some point during the trading session. February gold was last down $8.10 at $1,927.30 and March silver was down $0.184 at $23.57.

Global stock markets were mixed overnight, with European shares mostly down and Asian shares mostly up. China markets are quiet as the Lunar New Year holiday is being celebrated. U.S. stock indexes are pointed toward lower openings when the New York day session begins.

In overnight news, Germany, the workhorse of the European Union, reported its business sentiment hit a seven-month high in January.

The World Bank and Swiss Federal Office for Customs and Border Security reported Swiss exports of gold to China surged in 2022, at 478 metric tons. That’s up from 274 tons in 2021.

Gold prices seeing their best start to the year since 2012, flirting with a technical bull market

The key outside markets today see the U.S. dollar index slightly higher. Nymex crude oil futures prices are a bit weaker and trading around $80.00 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.438%.   

U.S. economic data due for release Wednesday is light and includes the weekly MBA mortgage applications survey and 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 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 this week’s high of $1,943.80 and then at $1,950.00. First support is seen at Tuesday’s low of $1,918.20 and then at this week’s low of $1,912.50. Wyckoff's Market Rating: 8.0

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 $23.26 and then at $23.00. 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.