Gold price continues to climb following dovish Powell

(Kitco New) – Gold prices are firmer in early U.S. trading Thursday as prices continue their record-setting climb. The precious metals are drawing support from Federal Reserve Chairman Jerome Powell leaning dovish on U.S. monetary policy while speaking to the U.S. House of Representatives committee Wednesday. April gold was last up $5.70 at $2,163.90. May silver was last down $0.123 at $24.37.

The marketplace has mostly digested Powell’s comments to the House committee, where he said it is likely the Fed will cut interest rates this year, as inflation has notably receded. The U.S. stock market rallied on Powells comments, while the U.S. dollar index sold off and Treasury yields dipped. Powell testifies before a Senate panel today.

Asian and European stock markets were mixed but mostly lower in overnight trading. U.S. stock index futures are set to open slightly firmer when the New York day session begins.

In overnight news, China economic data saw the world’s second-largest economy’s imports in January and February up 3.5%, year-on-year, while its exports were up 7.1% in the same period. Those numbers were better than market expectations. A Wall Street Journal headline today reads: “China’s growth figures don’t add up.”

Traders are awaiting what is arguably the U.S. data point of the month that is out Friday morning: the February employment situation report from the Labor Department. The key non-farm jobs number is seen coming in at up 198,000 versus the rise of 353,000 seen in the January report.

The key outside markets today see the U.S. dollar index lower, on follow-through selling from Wednesday’s losses. Nymex crude oil prices are down and trading around $78.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching 4.102%.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, the international trade in goods and services report, revised productivity and costs, consumer credit and monthly retail chain store sales data. U.S. President Biden delivers his State of the Union speech Thursday night.

Technically, the gold futures bulls have the solid overall near-term technical advantage and have momentum. A steep three-week-old uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at $2,200.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $2,100.00. First resistance is seen at the December high of $2,171.50 and then at $2,185.00. First support is seen at the overnight low of $2,151.70 and then at Wednesday’s low of $2,131.90.

The silver bulls have the overall near-term technical advantage and have momentum. Silver bulls’ next upside price objective is closing May futures prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at the February low of $22.19. First resistance is seen at this week’s high of $24.535 and then at $25.00. Next support is seen at $24.00 and then at Wednesday’s low of $23.785.

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com