(Kitco News) - Gold and silver prices are sharply higher in early U.S. trading Wednesday, as the bulls are coming back to life and extending this week’s recovery in prices. There are still some cross-currents in the geopolitical sphere that are supporting safe-haven demand for gold and silver. April gold was last up $147.70 at $5,083.00. March silver prices were up $6.594 at $89.90.
China gold ETF outflows are a warning for bulls. Bloomberg reported China’s major gold-backed exchange-traded funds recorded their biggest ever daily outflows Tuesday – nearly $1 billion combined – with investor confidence rattled by the metal’s abrupt pullback from an all-time high. Mainland China’s four largest bullion-backed ETFs saw total net outflows of about 6.8 billion yuan ($980 million) on Tuesday, according to data compiled by Bloomberg. That marked a second straight day of declines for the Huaan Yifu, Bosera, E Fund and Guotai ETFs, just days after they notched record inflows last week.
U.S. government partial shutdown ends. The partial federal government shutdown ended Tuesday after President Trump signed a funding deal he negotiated with Senate Democrats. The funding package continues to fund deportation flights and only funds the Department of Homeland Security through Feb. 13, while the rest of the government is funded through the Sept. 30 end of the fiscal year. A group of House conservatives initially opposed the deal but relented after Trump demanded they vote to pass the measure, which some Democrats voted against because it does not impose new protocols on immigration agents.
Iran wants talks with U.S. moved from Turkey to Oman, as tensions build. Iran has asked the U.S. to move diplomatic talks originally planned for Turkey to Oman and to limit the agenda to the Islamic Republic’s nuclear program, according to people familiar with the matter and as reported by Bloomberg. “Tehran is resisting U.S. pressure to include its ballistic-missile program and support for allied militias in the Middle East in the negotiations, said the people, who asked not to be identified discussing private matters. They added that Iran also opposes the participation of regional countries, aside from Turkey, in the negotiations. Contrasting positions over the scope of talks could heighten tensions with Washington,” said the report. President Trump has threatened to strike Iran if it doesn’t agree to a deal, which his administration has signaled must include Iran ending its support for regional proxies and curbs on its arms development as well as a framework for atomic activities. On Tuesday, a U.S. jet shot down an Iranian drone after it “aggressively approached” the Abraham Lincoln aircraft carrier in the Arabian Sea, the U.S. military and government said. Trump on Tuesday reiterated the U.S. and Iran are maintaining diplomatic contact.
U.S. to detail plans for expansive rare-earth supply chain rebuild. The Trump administration is expected to unveil “its grandest plan yet to rebuild supply chains of critical minerals needed for everything from jet engines to smartphones, likely through purchase agreements with partners on top of creating a $12 billion U.S. strategic reserve to help counter China’s dominance,” the Associated Press reports. Vice President JD Vance is set to deliver a keynote address today at a meeting that Secretary of State Marco Rubio is hosting with officials from several dozen European, Asian and African nations. The U.S. is expected to sign deals on supply chain logistics, though details have not yet been revealed. Rubio met Tuesday with foreign ministers from South Korea and India to discuss critical minerals mining and processing, said the AP. The meeting and expected agreements will come just two days after President Donald Trump announced “Project Vault,” or a stockpile of critical minerals to be funded with a $10 billion loan from the U.S. Export and Import Bank and nearly $1.67 billion in private capital.
Top China official vows big push for more domestic consumption. China will press ahead with building a unified market to unleash domestic consumption as countries around Asia face a “pivotal juncture” in the transformation of the global economy, a top China economic official said and as reported by Bloomberg. Vice Finance Minister Liao Min said China is shifting towards new growth drivers in order to pursue high-quality development and will create more business opportunities for the region as the country opens its economy further. Liao said the current global economic landscape is complex and marked by challenges and policy uncertainty, citing ongoing volatility, rising geopolitical tensions, and supply‑chain disruptions.
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, April gold futures last week has formed a big and bearish “key reversal” down on the daily bar chart, which is one chart clue that a market top is in place. Bulls’ next upside price objective is to produce a close above solid resistance at $5,250.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at this week’s low of $4,423.20. First resistance is seen at the overnight high of $5,113.90 and then at $5,200.00. First support is seen at $5,000.00 and then at the overnight low of $4,630.40. Wyckoff's Market Rating: 6.5.
March silver futures see a bearish pennant pattern possibly forming on the daily bar chart. The 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 $70.00. First resistance is seen at $91.00 and then at $92.50. Next support is seen at $85.00 and then at the overnight low of $83.00. Wyckoff's Market Rating: 5.5.
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