(Kitco News) - Gold prices are solidly up and silver prices are strongly higher in early U.S. trading Tuesday. Both metals have made impressive rebounds from Monday’s shellacking that saw some of the biggest daily price losses in their trading history. Today’s trading action in gold and silver is extra important, as strong follow-through selling pressure from Monday’s huge losses would produce serious near-term technical damage and destroy the near-term price uptrends. However, the gold and silver bulls are out of the gate strong so far today and are doing some perceived bargain buying after the big dips Monday. February gold was last up $70.30 at $4,413.50. March silver prices were up $4.875 at $75.40.
In overnight news, Russia-Ukraine peace initiative faces potential setback. President Trump's campaign to end the war in Ukraine faced new complications when Russian President Putin said he would revise his country's negotiating position after claiming Ukrainian drones targeted his residence. Ukrainian President Zelenskiy dismissed the Russian claims as a "new lie" and warned that Moscow could be using it as an excuse to prepare an attack on government buildings in Kyiv. Putin told Trump that Moscow intends to work closely with the U.S. on peace efforts but would reconsider previously reached agreements, and the two leaders agreed to maintain their dialogue. Putin told Trump of his decision in a call Monday, according to the Kremlin, even as Kyiv cast the Russian allegations as a fabrication aimed at derailing the peace process. Trump addressed the dispute while speaking to reporters in Florida, saying that Putin had told him about the purported attack during their discussion.
U.S. military strikes dock area inside Venezuela. President Trump said the U.S. military struck a facility inside Venezuela, in what would be a significant escalation in its campaign against drug trafficking operations there. “There was a major explosion in the dock area where they load the boats up with drugs,” Trump told reporters Monday, confirming comments from last week, Bloomberg reported. The U.S. also carried out another strike on an alleged drug boat in international waters, with the military saying the operation killed two drug traffickers. Trump said he had spoken with Nicolas Maduro "pretty recently," but dismissed the conversation as unproductive, saying "Nothing much comes of it." CNN, citing unnamed sources, reported Monday night that earlier this month the CIA carried out a drone attack on a dock along the Venezuelan coast that U.S. authorities believe was tied to a drug gang, Bloomberg said.
China-Taiwan tensions rising. China fired dozens of rockets into waters near Taiwan as part of its most expansive exercises in decades, testing President Trump’s support for the self-ruled island after a major U.S. weapons sale. “The People’s Liberation Army conducted a second day of snap drills on Tuesday, simulating a blockade of one of the world’s busiest shipping lanes, as part of live-fire exercises encircling the global chip hub. For the first time since then-House Speaker Nancy Pelosi visited Taipei over three years ago, China announced drill zones cutting into Taiwan’s territorial waters and no-fly warnings for the affected areas,” Bloomberg reported. Flights to Taiwan’s offshore outposts were disrupted, while international routes went mostly undisturbed. China’s latest exercises – dubbed Justice Mission-2025 – come as President Xi Jinping ramps ups pressure on self-ruled Taiwan in an attempt to further isolate the island. That includes launching a campaign against Japanese Prime Minister Sanae Takaichi, after she suggested Tokyo could deploy its military with other nations if China attacked Taiwan, which Beijing considers its own territory.
China says it wants better relations with United States. China has called for a new model for its engagement with the U.S., seeking to cement a recent thaw with the Trump administration while reinforcing its red line on Taiwan. Chinese Foreign Minister Wang Yi proposed “a new paradigm of positive interaction” with Washington, but reiterated Beijing’s opposition to U.S. arms sales to Taiwan and the importance of the “reunification of Taiwan.” Beijing’s calls for more stable U.S. ties build on a one-year trade truce struck with Washington, with diplomatic momentum expected to build through 2026, including visits by Trump to China and Xi to the U.S. “We will promote the healthy, stable, and sustainable development of China-U.S. relations,” Yi said in a speech at a symposium about foreign relations on Tuesday. He added that China will remain engaged with the U.S. on the basis of mutual respect but will not “yield an inch” on core interests, Bloomberg reported.
The key outside markets today see the U.S. dollar index slightly up. Crude oil prices are up a bit and trading around $58.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.12%.
Technically, February gold futures bulls’ next upside price objective is to produce a close above solid resistance at the contract/record high of $4,584.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $4,200.00. First resistance is seen at $4,433.00 and then at $4,450.00. First support is seen at the overnight low of $4,338.00 and then at this week’s low of $4,416.00. Wyckoff's Market Rating: 7.0.
March silver futures see Monday’s price action still appearing to have produced a big and bearish buying exhaustion tail, whereby the bulls run out of gas at the high and prices back way off to close near the daily low. Silver also saw a big and bearish “key reversal” down on the daily bar chart Monday. The bulls’ next upside price objective is closing prices above solid technical resistance at Monday’s record high of $82.67. The next downside price objective for the bears is closing prices below solid support at $67.50. First resistance is seen at $75.00 and then at $76.00. Next support is seen at $74.00 and then at $73.00. Wyckoff's Market Rating: 7.0.
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