Gold price up on technical buying, rebound in crude oil

(Kitco News, Tues. Jan.  9th, 2024) – Gold prices are moderately higher and silver near steady in early U.S. trading Tuesday. Chart-based buying is featured in gold early today. Higher crude oil prices are also a bullish outside-market element. However, gains in the precious metals are being limited by a firmer U.S. dollar index and rising U.S. Treasury yields on this day. February gold was last up $8.80 at $2,042.30. March silver was last up $0.03 at $23.34.

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

In overnight news, reports said China’s central bank has indicated it may lower its reserve requirement ratio to boost lending and support economic growth, the head of the central bank’s monetary policy department told a local news agency. The PBOC official’s remark does not suggest an imminent cut but may indicate such action is on the table in the coming months, Bloomberg reported. Similar comments were made last July before the central bank reduced the reserve requirement ratio for major banks in September of last year. The metals markets may also be getting some support from this news, which could promote better consumer and commercial demand for metals from China in the coming months.

The U.S. data points of the week will be the December consumer price index report on Thursday and the December producer price index report on Friday. U.S. inflation has cooled in recent months, which has allowed the Federal Reserve to back off on its tighter monetary policy. The CPI report is seen up 3.3%, year-on-year versus a rise of 3.1% in the November report.

The key outside markets today see the U.S. dollar index moderately higher. Nymex crude oil prices are solidly higher and trading around $72.50 a barrel. Meantime, the yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.046%.

U.S. economic data due out Tuesday includes the weekly Johnson Redbook retail sales report, the NFIB small business index, the U.S. international trade report and the RCM/TIPP economic optimism index.

Technically, the gold futures bulls still have the overall near-term technical advantage but are fading. Prices are still in a three-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in March futures above solid resistance at $2,100.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. First resistance is seen at $2,050.00 and then at this week’s high of $2,053.30. First support is seen at the overnight low of $2,034.00 and then at this week’s low of $2,022.70.

The silver bears have the overall near-term technical advantage. Prices are in a choppy, four-week-old downtrend on the daily bar chart. Silver bulls’ next upside price objective is closing March 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 November low of $22.26. First resistance is seen at the overnight high of $23.565 and then at last Friday’s high of $23.715. Next support is seen at $23.00 and then at the December low of $22.785.

Posted by ;

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com