(Kitco News) - Gold and silver prices are slightly up in midday U.S. trading Tuesday, on mild corrective bounces following recent selling pressure. Short covering (the buying back of previously sold, or short, futures positions) from the shorter-term futures traders is featured. A rally in the U.S. dollar index and an up-tick in U.S. Treasury yields today did limit the upside in the precious metals. February gold was last up $3.50 at $2,025.50. March silver was last up $0.174 at $22.465.
U.S. stock index futures are a bit weaker near midday, on profit taking after the S&P and Nasdaq indexes hit record highs Monday. Risk appetite in the general marketplace has up-ticked just recently. Reads a Barron’s headline today: “Fed rate cut looks more distant, but soft landing’s on track.” The rallying U.S. stock indexes are a bearish element for the gold and silver markets, as equities are a competing asset class.
In other news, reports said China’s government is considering a $280 billion cash infusion to stabilize its eroding stock market. China held its 1-year and 5-year loan prime rates steady on Monday and then followed with the news today to bolster its stock market. The Shanghai Composite Index hit a 5-year low this month. The news of a potential government cash infusion lifted the Shanghai index by 0.5% while the Shenzhen Component Index rose around 1.5%. China’s potential new stimulus is friendly for gold and silver, as it suggests improving consumer and commercial demand coming from the world’s second-largest economy.
The Bank of Japan kept its monetary policy steady at its meeting Tuesday. The BOJ kept its deposit rate at minus 0.1% and kept its 10-year bond yield target at around zero percent.
The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are near steady and trading around $74.75 a barrel. Meantime, the yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.145%.
Technically, February gold futures bulls have the overall near-term technical advantage but have faded recently. A three-month-old uptrend on the daily bar chart is in serious jeopardy. Bulls’ next upside price objective is to produce a close above solid resistance at $2,067.30. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. First resistance is seen at today’s high of $2,039.30 and then at $2,050.00. First support is seen at this week’s low of $2,017.40 and then at the January low of $2,004.60. Wyckoff's Market Rating: 6.0.
March silver futures prices hit a three-month low Monday. The silver bears have the solid overall near-term technical advantage. A steep six-week-old
downtrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $23.72. The next downside price objective for the bears is closing prices below solid support at the October low of $21.17. First resistance is seen at this week’s high of $22.78 and then at $23.00. Next support is seen at today’s low of $22.165 and then at $22.00. Wyckoff's Market Rating: 2.5.
March N.Y. copper closed up 380 points at 380.15 cents today. Prices closed nearer the session high today. The copper bears have the overall near-term technical advantage. Prices are in a downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 385.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the October low of 355.75 cents. First resistance is seen at today’s high of 380.70 cents and then at 385.00 cents. First support is seen at this week’s low of 374.40 cents and then at the January low of 371.45 cents. Wyckoff's Market Rating: 4.0.
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