(Kitco News) - Gold prices strongly higher and hit another new all-time high overnight, on safe-haven demand amid risk aversion pervading the general marketplace. Silver prices are weaker on profit taking from the shorter-term futures traders. February gold was last up $94.30 at $4,860.00. March silver prices were down $0.451 at $94.18.
Gold and silver prices this week have extended their record rallies as the crisis over Greenland and a meltdown in Japanese government debt support safe-haven demand. February Comex gold futures hit an all-time high of $4,891.10 an ounce overnight, with March Comex silver futures on Tuesday hitting a new peak of $95.78 an ounce. Gold is poised for more support from central banks, with the National Bank of Poland approving plans to purchase another 150 tons and Bolivia's central bank resuming purchases for its foreign reserves, reports said.
Marketplace awaits Trump’s delayed speech in Davos today. U.S. stock futures staged a tentative recovery as traders and investors await President Trump’s address at Davos to see whether he will ratchet down days of tensions with Europe over U.S. ambitions to take Greenland. Selling pressure in U.S. and global markets eased after Trump struck a more conciliatory tone late Tuesday, ahead of his departure for the World Economic Forum in Davos, Switzerland, even as he continued to insist the U.S. should take control of the self-ruling territory. Trump was due to speak in Davos at 2:30 p.m. local time, but his appearance will be delayed after his aircraft developed technical issues. Treasury Secretary Scott Bessent said Trump was likely to be about three hours late, though the schedule had yet to be finalized. ”European leaders arriving at Davos this week are scrambling not just to manage Trump, but to manage one another. German Chancellor Friedrich Merz is seeking dialogue, French President Emmanuel Macron is openly pushing back, and smaller states are watching anxiously to see whether this crisis produces European solidarity — or exposes how it can fracture under pressure,” said Bloomberg in a report. Meantime, U.S. Treasury Secretary Bessent cautioned European nations against increasing their military presence on Greenland.
Bessent criticized Macron for calling to conduct a NATO exercise on Greenland, saying Macron should focus on France's budget instead.
Global bond traders closely monitoring Japan’s government bond market. A sharp rise in volatility in Japan’s government bond market could spill over into other markets, forcing some investors to cut back risk across portfolios, Citigroup Inc. said and as reported by Bloomberg.
“Risk parity funds may need to sell as much as one third of their current exposure, potentially triggering up to $130 billion of bond selling in the U.S. alone, according to Mohammed Apabhai. Volatility in Japan’s bond market has been picking up since early last year amid growing fiscal concerns, with meaningful spillover impact globally, and analysts now see Japan as a major exporter of global bond volatility,” said the report. Japanese Prime Minister Sanae Takaichi’s election pledge to cut food taxes has triggered a surge in long-end yields, with 30- and 40-year bond yields jumping more than 25 basis points to fresh highs on Tuesday. With a snap election in Japan coming on Feb. 8, traders and investors are worried there will be more volatility ahead.
Natural gas futures prices spike amid Arctic outbreak. U.S. natural gas futures prices have gained more than 50% in just two days, with freezing temperatures taking hold of swathes of the country and lifting demand for heating. Contracts are on track for their biggest weekly gain in over 35 years, Bloomberg reported. Cold weather is causing energy prices to surge across the globe. Japan’s power price rose to a three-month high on Wednesday and European gas futures are up 29% so far this month. “Markets are monitoring for potential weakening of the polar vortex winds that could bring more freezing temperatures,” said the report.
The key outside markets today see crude oil prices near steady and trading around $60.25 a barrel. The U.S. dollar index is slightly down and the U.S. 10-year Treasury note yield is presently 4.28%.
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 $5,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $4,539.10. First resistance is seen at the record high of $4,891.10 and then at $4,900.00. First support is seen at $4,800.00 and then at the overnight low of $4,761.50. Wyckoff's Market Rating: 10.0.
March silver futures bulls have the strong chart advantage and their next upside price objective is closing prices above solid technical resistance at $100.00. The next downside price objective for the bears is closing prices below solid support at $85.00. First resistance is seen at the record high of $95.78 and then at $96.00. Next support is seen at $93.00 and then at $92.50. Wyckoff's Market Rating: 9.5.
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