Important Follow-Through Price Gains For Gold, Silver Tuesday

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Jan 05, 2021 11:51 NY TimeKitco 10AM Silver Fix

(Kitco News, Tues. Jan. 5th, 2020) –  Gold and  silver futures prices are firmer in early U.S. trading Tuesday, on important follow-through strength after big gains posted Monday. Gold hit a seven-week high overnight. The metals are seeing support from a seriously depreciating U.S. dollar on the foreign exchange market that saw the dollar index hit a 2.5-year low Monday. The specter of rising and possibly problematic price inflation on the horizon is also bullish for the metals. February gold futures were last up $5.00 at $1,951.80 and March Comex silver was last up $0.236 at $27.595 an ounce. 

Global stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. Monday’s price action in the U.S. stock indexes hints the bulls are now exhausted. The S&P 500 and Nasdaq pushed to new record highs early on but by the end of the day finished near their daily lows, scoring bearish “outside days” down on the daily bar charts. And if there is follow-through selling pressure Tuesday, then more significantly bearish “key reversals” down would be confirmed in both markets, which would be one technical clue that market tops are in place. Keep in mind these potentially bearish chart patterns have occurred in the very recent past, only to see the stock indexes push to new highs.

Focus in the U.S. Tuesday is on the two U.S. Senate seats in Georgia that are being voted upon today, with big implications. If both seats go to the Democrats, they would control the Senate. Outcomes of the elections may not be known until later this week. The stock market fares better in gridlock, which would be more likely if the Democrats did not control the Senate. The commodity markets would likely get a lift if the Senate is controlled by the Democrats, as government spending would likely increase.

The  U.S. dollar index is lower today and not far above Monday’s 2.5-year low in early U.S. trading. The other important outside market sees February Nymex crude oil futures prices higher and trading around $48.50 a barrel. Oil prices hit a nine-month high on Monday. The yield on the benchmark 10-year U.S. Treasury note futures is currently around 0.93%. 

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the ISM New York report on business, the ISM report on business manufacturing and domestic auto industry sales.

Technically, the February gold futures bulls have the firm 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 the November high of $1,973.30. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at the overnight high of $1,941.00 and then at $1,950.00. First support is seen at $1,925.00 and then at the overnight low of $1,906.10.

March silver futures bulls have the firm overall near-term technical advantage amid a five-week-old price uptrend in place on the daily chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the August 2020 high of $30.365 an ounce. The next downside price objective for the bears is closing prices below solid support at $26.00. First resistance is seen at Monday’s high of $27.76 and then at $28.00. Next support is seen at the overnight low of $27.15 and then at $27.00

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com