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Solid price gains for gold, silver on less-hawkish Fed

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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 sharply up in early U.S. trading Thursday, with gold scoring a nine-month high. The precious metals bulls are being fueled by perceptions the U.S. Federal Reserve will let up on its monetary policy tightening sooner rather than later. April gold was last up $25.90 at $1,968.80 and March silver was up $0.886 at $24.49.

The marketplace is still digesting Wednesday afternoon's FOMC statement and Fed Chair Jerome Powell's press conference. The Fed raised the Fed funds rate range by 0.25%, as widely expected. However, Powell's remarks at his presser led the marketplace to believe the Fed is close to ending its string of interest rate increases. Powell said inflation is receding but needs to pull back farther. He mentioned the word "disinflation" as characterizing the present U.S. economic conditions. Most agreed that in the final assessment, Powell was not nearly as hawkish as he had been in recent FOMC press conferences and left the door open to a Fed "pivot" sooner rather than later.

Global stock markets were mixed overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins, following an afternoon surge to multi-week highs on Wednesday.

Today is the regular monetary policy meetings of the European Central Bank and the Bank of England saw both central banks raise their main interest rates by 0.5%. The moves were not unexpected.

Gold price gains as Fed Chair Powell talks disinflation but warns it's too early to declare victory

Focus now turns to Friday morning's January U.S. employment situation report from the Labor Department. The key non-farm payrolls number is expected to be up 187,000 jobs, following a rise of 223,000 in the December report.

The key outside markets today see the U.S. dollar index a bit weaker and hit a nine-month low overnight. Nymex crude oil futures prices are a bit weaker and trading around $76.25 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.409%.   

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, preliminary productivity and costs, manufacturers' shipments and inventories, and the monthly chain store sales index.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold futures bulls have the solid overall near-term technical advantage and have gained fresh power late this week. A three-month-old uptrend is in place on the daily bar chart. Bulls' next upside price objective is to produce a close in April futures above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at this week's low of $1,915.50. First resistance is seen at today's high of $1,975.20 and then at $1,985.00. First support is seen at $1,950.00 and then at Wednesday's low of $1,936.10. Wyckoff's Market Rating: 8.5

Live 24 hours silver chart [ Kitco Inc. ]

The silver bulls have the firm overall near-term technical advantage and have gained power late this week. 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 the January low of $22.845. First resistance is seen at today's high of $24.67 and then at $24.775. Next support is seen at $24.00 and then at $23.50. 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.