(Kitco News) - Gold and silver prices are lower in early U.S. trading Wednesday, on profit taking from the shorter-term futures traders. Stiff technical resistance at the record highs just above present price levels are also giving the gold and silver bulls pause at mid-week. February gold was last down $32.40 at $4,463.70. March silver prices were down $2.344 at $78.695.
In overnight news:
China’s central bank continues stocking up on gold. China’s central bank extended its gold-buying streak to 14 months, underscoring sustained official demand for bullion as prices surge to record. Bullion held by the People’s Bank of China rose by 30,000 troy ounces last month, according to data released on Wednesday and as reported by Bloomberg. That brings total purchases since November 2024, when the current buying cycle started, to around 1.35 million ounces, or 42 tons. Gold has experienced a price-volatile run in the last few weeks, after surging to a record high last fall. Still, the metal delivered its best annual performance since 1979 on the back of central bank purchases, geopolitical angsts as well as debasement trades — a retreat from sovereign bonds and currencies for alternative stores of value.
Venezuelan oil headed for the United States. President Trump late Tuesday said Venezuela would relinquish as much as 50 million barrels of oil to the US, worth roughly $2.8 billion at the current market price, announcing the cargoes would be sold with proceeds benefiting both countries. “The announcement late on Tuesday, which came with few details, marked a significant step up for the U.S. government as it seeks to extend its economic influence in Venezuela and beyond after the capture of leader Nicolas Maduro over the weekend. It’s also a blow to China, previously the top buyer of the country’s oil and a close partner,” reported Bloomberg. “I am pleased to announce that the Interim Authorities in Venezuela will be turning over between 30 and 50 MILLION Barrels of High Quality, Sanctioned Oil, to the United States of America,” Trump wrote in a social media post. “This Oil will be sold at its Market Price, and that money will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States!” he added and as reported by Bloomberg. Chevron Corp. has a small fleet of ships sailing to Venezuela to export the country's oil. Chevron is poised to export more Venezuelan oil this month, with at least 11 ships scheduled to arrive in Venezuelan government-controlled ports, according to preliminary data compiled by Bloomberg. The U.S. is enforcing a blockade on outgoing oil, with at least 12 vessels bound for Venezuela turning away under heavy U.S. military presence in the Caribbean.
White House says U.S. acquisition of Greenland a national security priority. “President Trump has made acquiring Greenland a national security priority of the United States,” according to White House Press Secretary Karoline Leavitt. “The president and his team are discussing a range of options to pursue this important foreign policy goal, and of course, utilizing the U.S. military is always an option at the commander in chief’s disposal,” she said Tuesday. Still, U.S. Secretary of State Marco Rubio downplayed the notion of any U.S. military action in a briefing with lawmakers on Monday, instead signaling that a U.S. invasion is not imminent and that the U.S. goal was to buy the island from Denmark. European leaders have issued a joint statement warning that the U.S. needs to respect the territorial integrity of Greenland and Denmark, and that security in the Arctic must be achieved collectively with NATO allies.
Marketplace watching increasing civil unrest in Iran. Iran is facing a new round of civilian protests challenging the country's theocracy. Since the U.S. military captured Venezuelan dictator Nicolás Maduro, a longtime ally of Tehran, Iranian state media headlines and officials have condemned the operation. “In the streets and even in some official conversations, however, there's a growing question over whether a similar mission could target Iran’s top officials including the supreme leader, 86-year-old Ayatollah Ali Khamenei. The paranoia feeds into wider worries among Iranians. Many fear that close U.S. ally Israel will target Iran again as it did during the 12-day war it launched against Tehran in June,” said a Bloomberg report. The U.S. for a long time has accused the Iranian-backed Hezbollah of running drug-smuggling operations to fund its operations, including in Latin America, which the group denies. Iran is roughly twice the size of Venezuela and has what analysts consider to be a much stronger military and robust security forces. “The memory of Operation Eagle Claw, a failed U.S. special forces mission to rescue hostages held after the 1979 U.S. Embassy takeover in Tehran, also haunts Washington, said Bloomberg. Israeli Prime Minister Benjamin Netanyahu did not directly link Venezuelan strongman Maduro's detention to Iran but acknowledged the protests sweeping Tehran and other cities, saying: “It is very possible that we are standing at the moment when the Iranian people are taking their fate into their own hands.” Hours before the U.S. action in Venezuela, President Trump warned Iran that if Tehran “violently kills peaceful protesters” the U.S. “will come to their rescue.”
Eurozone inflation rate falls. Euro-area inflation has eased to the European Central Bank’s target, supporting the view of policymakers that EU interest rates can stay at current levels unless the economic outlook changes significantly. Eurozone consumer prices rose 2% from a year ago in December, down from 2.1% in the previous month and matching economists’ estimates. Core inflation, which strips out volatile food and energy costs, slowed to 2.3% annually, while closely watched services inflation also eased. Price growth has been hovering around the 2% goal for more than half a year, allowing the ECB to keep borrowing costs unchanged since June. “Economists and investors don’t envisage any further moves for the foreseeable future,” said a Bloomberg report.
The key outside markets today see the U.S. dollar index slightly firmer. Crude oil prices are slightly down and trading around $56.75 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 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 the overnight high of $4,512.40 and then at $4,550.00. First support is seen at this week’s low of $4,437.90 and then at $4,400.00. Wyckoff's Market Rating: 7.5.
March silver futures see today’s price action raising the specter of a bearish double-top reversal pattern forming on the daily bar chart. The bulls’ next upside price objective is closing prices above solid technical resistance at the record high of $82.67. The next downside price objective for the bears is closing prices below solid support at last week’s low of $69.225. First resistance is seen at $80.00 and then at $81.00. Next support is seen at $77.50 and then at Tuesday’s low of $75.70. Wyckoff's Market Rating: 7.5
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