Gold price down as bond yields, USDX up

(Kitco News, Tues.  Jan. 18th, 2022) – Gold futures prices are lower in early U.S. trading Tuesday. The precious metal is seeing price pressure from rising government bond yields and a stronger U.S. dollar index on this day. Some keener risk appetite in the marketplace early this week is limiting the downside in the safe-haven metal. February gold futures were last down $10.90 at $1,805.70 and March Comex silver was last up $0.017 at $22.935 an ounce.

Global stock markets were mostly weaker overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins, on keener risk aversion after a three-day holiday weekend. Crude oil prices pushed to a seven-year high overnight after the United Arab Emirates was hit by a deadly drone attack on its capital. While the damage was limited, the strikes by Yemen’s Iranian-backed Houthi rebels reminds how vulnerable oil producers are to attack from drones. Nymex crude oil futures prices and trading around $85.25 a barrel. North Korea is also making geopolitical noise by test-firing missiles.

Bond yields are also on the rise this week. The U.S. Treasury 10-year note is presently yielding 1.818%–the highest level in two years. Traders and investors are sensing that inflationary pressures will get worse before they get better. Rising inflation should be ultimately bullish for the metals markets. Meantime, the U.S. dollar index is making a good rebound Tuesday, after hitting a two-month low last Friday.

Jeffrey Gundlach is on ‘recession watch,’ remains bullish on gold long-term

In other news, China cut its main interest rates to prop up the world’s second-largest economy. This comes as other major central banks of the world are tightening their monetary policies. China President Xi Jinping at the Davos virtual economic summit warned major industrial nations not to raise interest rates too quickly, which could choke the global economic recovery.

U.S. economic data due for release Tuesday includes the Empire State manufacturing survey, the NAHB housing market index and Treasury international capital data.

Technically, the February gold futures bulls have the overall near-term technical advantage amid a price uptrend in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at $1,850.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the January low of $1,781.30. First resistance is seen at today’s high of $1,822.90 and then at the January high of $1,833.00. First support is seen at $1,800.00 and then at $1,790.00. Wyckoff’s Market Rating: 6.5

March silver futures bears have the overall near-term technical advantage. However, bulls are working on starting a price uptrend on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the December high of $23.48 an ounce. The next downside price objective for the bears is closing prices below solid support at the December low of $21.41. First resistance is seen at today’s high of $23.135 and then at last week’s high of $23.345. Next support is seen at $22.68 and then at $22.50.

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com