Gold, silver hit hard by rally in USDX, higher U.S. Treasury yields

(Kitco News, Mon. Jan. 3rd, 2022) – Gold and silver futures prices are sharply lower and near daily lows in midday U.S. dealings on this first trading day of 2022. Bearish daily elements that include a solidly higher U.S. dollar index sharply rising U.S. Treasury yields today are negatives for the precious metals. Also, mostly higher stock indexes Monday suggest still-scant trader and investor risk aversion in the marketplace at present—and that’s bearish for the safe-haven metals. February gold futures were last down $29.60 at $1,799.00 and March Comex silver was last down $0.487 at $22.87 an ounce.

Global stock markets were mostly firmer overnight. Markets in China, Japan and Australia were closed. U.S. stock indexes are slightly higher at midday but nearer their daily lows. The S&P 500 stock index gained 27% in 2021, while notching 70 record highs on the year.

While there is little risk aversion in the marketplace at present, some market analysts believe 2022 will be a rockier year for the stock markets, what with rising inflation, central banks reining in their heretofore easy money policies, and the globe still doing battle with the pandemic. There are also lingering geopolitical issues that could quickly move to the front burner of the marketplace, such as Russia’s troop build-up on its Ukrainian border, and China’s property market bubble that may be bursting. These potentials, if realized, could work in favor of the safe-haven metals market bulls this year.

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The key “outside markets” today see Nymex crude oil futures prices up and trading around $76.30 a barrel. The U.S. dollar index is sharply higher at midday. The yield on the U.S. 10-year Treasury note is presently fetching 1.618%. U.S. bond yields have been on the rise for three weeks, including making a big jump today.

Technically, February gold futures prices scored a big and bearish “outside day” down today after hitting a five-week high early on. Bulls still have the overall near-term technical advantage and are still working on a near-term price uptrend. However, bulls need to show fresh power soon to keep the uptrend alive. Bulls’ next upside price objective is to produce a close above solid resistance at today’s high of $1,833.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,775.00. First resistance is seen at $1,815.70 and then at last week’s high of $1,821.60. First support is seen at last week’s low of $1,789.10 and then at $1,785.00. Wyckoff’s Market Rating: 6.0

March silver futures prices scored a bearish “outside day” down on the daily bar chart today. The silver bears have the overall near-term technical advantage. Recent price action suggests a market bottom is in place. Bulls are working on a price uptrend but need to show fresh power soon to keep it alive. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $24.00 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 $23.00 and then at today’s high of $23.44. Next support is seen at last week’s low of $22.60 and then at $22.185. Wyckoff’s Market Rating: 3.5.

March N.Y. copper closed down 480 points at 441.40 cents today. Prices closed near mid-range today and scored a bearish “outside day” down. The copper bulls have the slight overall near-term technical advantage but need to show fresh power soon to keep it. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at the October high of 477.70 cents. The next downside price objective for the bears is closing prices below solid technical support at 425.00 cents. First resistance is seen at today’s high of 448.05 and then at the November high of 451.15 cents. First support is seen at today’s low of 433.50 cents and then at 430.00 cents.

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com