(Kitco News) - Gold and silver prices are higher and hit new record highs in early U.S. trading Wednesday. Safe-haven demand and bullish technical charts are propelling the two metals into the stratosphere. Retail gold and silver traders also presently have a severe case of FOMO (fear of missing out) on these major bull moves. The late-comers on the long sides of gold and silver are playing with fire and may get their fingers burned. February gold was last up $9.20 at $4,515.00. March silver prices were up $0.843 at $71.99.
Platinum this week has soared to an all-time high, trading above $2,300 an ounce for the first time on tight supplies and historically elevated borrowing costs. The metal has advanced more than 150% this year, the biggest annual gain since Bloomberg began compiling data in 1987. Platinum is on course for a third annual deficit this year, due to supply disruptions in major producer South Africa.
Trump expects Fed to lower rates if U.S. economy faring well. President Trump on Tuesday said he expects his Federal Reserve to lower interest rates if the U.S. economy is doing well, the latest signal the president is eager for a Fed chair nominee committed to borrowing cost cuts as he nears an announcement of his choice to replace current Chairman Jerome Powell. “I want my new Fed Chairman to lower Interest rates if the market is doing well, not destroy the market for no reason whatsoever,” Trump said in a social media post Tuesday. “Anybody that disagrees with me will never be the Fed Chairman!” Trump has repeatedly said he’s interested in breaking recent trends, where promising economic data is sometimes met by a market selloff due to concerns over inflation and corresponding hikes by the Fed. “In the old days, when there was good news, the market went up,” Trump wrote. “Nowadays, when there is good news, the market goes down, because everybody thinks that interest rates will be immediately lifted to take care of ‘potential’ Inflation.”
Peace talks stall as Ukraine disputes U.S.-proposed land division issue. Ukraine and the U.S. remain split primarily on territorial issues in talks on a peace plan to end Russia’s war, according to President Volodymyr Zelenskiy and as reported by Bloomberg. Ukraine rejects Russia's demand to give up land in eastern Donetsk, fearing it would leave the country vulnerable to a new Russian attack. U.S. envoys will hand over the draft of the 20-point peace plan to their Russian counterparts, with Ukraine aiming to persuade the U.S. to propose that Russia halt the war along the current contact line.
China supports cautious monetary policy stimulus. China’s central bank reaffirmed its supportive monetary policy stance while signaling continued caution toward aggressive stimulus, reinforcing a shift toward securing long-term stability over immediate fixes, said a report from Bloomberg. The People’s Bank of China reiterated it will guide borrowing costs to continue hovering at a low level, according to a Wednesday statement following its fourth-quarter monetary policy committee meeting. The bank repeated a pledge to step up “cross-cyclical” policies, a phrase suggesting it aims to look beyond short-term volatility and avoid excessive stimulus that could create structural imbalances. This measured approach comes despite deepening weakness in domestic demand, with retail sales last month expanding at their lowest pace since the crash caused by Covid. Fixed-asset investment is also on track for its first annual decline in data going back to 1998, after a crash made worse by a drought in funding for infrastructure. The committee said it will “grasp the strength, pace and timing” of policy implementation based on evolving domestic and overseas conditions. The PBOC also reiterated its commitment to maintaining the yuan’s basic stability at a reasonable and balanced level to guard against overshooting risks. The PBOC has adopted a cautious approach this year, frequently disappointing economists who had anticipated more aggressive interest rate cuts. This restraint reflects the central bank’s deeper concerns over protecting shrinking bank margins and preserving policy space for future downturns, said Bloomberg.
The key outside markets today see the U.S. dollar index near steady. Crude oil prices are near steady and trading around $58.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.15%.
Note: The gold market operates through two primary pricing mechanisms. The first is the spot market, which quotes prices for on-the-spot purchase and immediate delivery. The second is the futures market, which sets prices for delivery at a future date. Due to year-end positioning market liquidity, the December gold futures contract is currently the most actively traded on the CME.
Technically, February gold futures bulls’ next upside price objective is to produce a close above solid resistance at $4,600.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $4,300.00. First resistance is seen at the overnight record high of $4,555.10 and then at $4,575.00. First support is seen at the overnight low of $4,496.50 and then at $4,433.00. Wyckoff's Market Rating: 9.5.
March silver futures bulls’ next upside price objective is closing prices above solid technical resistance at $75.00. The next downside price objective for the bears is closing prices below solid support at $65.00. First resistance is seen at the overnight record high of $72.75 and then at $73.00. Next support is seen at $71.00 and then at $70.00. Wyckoff's Market Rating: 9.5.
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