Gold gains on technical buying, China demand

(Kitco News, Wed. Jan. 8th, 2025)- Gold prices are solidly higher and silver prices modestly up near midday Wednesday. Some chart-based buying is featured as February gold pushed to a three-week high. News that China’s central bank has resumed stocking up on gold is also a bullish underlying factor for the yellow metal. February gold was last up $15.10 at $2,680.50 and March silver was up $0.119 at $30.79.

The U.S. data point of the day at mid-week is the FOMC minutes that are out this afternoon. The U.S. government and stock market are closed Thursday for former President Jimmy Carter’s national day of mourning.

In overnight news, Bloomberg reports a growing number of fund managers are warning that U.S. Treasury market repricing may have farther to go despite the Fed’s recent interest rate cuts. Options prices now suggest the potential for a rise in 10-year U.S. Treasury note yields to 5%. Meantime, China’s 10-year bonds now yield 3 percentage points less than the U.S. 10-year note. Chinese investors are moving into China’s bond market on fears of a slowing Chinese economy. The Chinese yuan continues to sell off despite China central bank intervention attempts to stabilize the Chinese currency.

The U.S. data point of the week is the employment situation report for December on Friday. It’s forecast to show non-payrolls increasing by 160,000. That compares to a gain of 227,000 in the November jobs report.

The key outside markets today see the U.S. dollar index solidly higher. Nymex crude oil futures prices down a bit after hitting a three-month high overnight and trading around $73.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is on the rise and is presently around 4.68%.

Technically, February gold futures bulls have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $2,700.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the November low of $2,565.00. First resistance is seen at today’s high of $2,683.90 and then at $2,700.00. First support is seen at today’s low of $2,658.40 and then at $2,650.00.

March silver futures bears have the slight overall near-term technical advantage. A nine-week-old downtrend is still in place on the daily bar chart. More gains this week would negate the downtrend, however. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $32.00. The next downside price objective for the bears is closing prices below solid support at the December low of $29.145. First resistance is seen at today’s high of $31.045 and then at $31.50. Next support is seen at this week’s low of $30.41 and then at $30.00.

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com