Mild price pressure on gold amid dimming hopes for U.S. rate cut soon

(Kitco News, Mon. Jan. 22nd, 2024) – Gold prices are slightly down and silver prices solidly lower and hit a three-month low in early U.S. trading Monday. Some technical selling pressure is featured in both metals to start the trading week. The precious metals bulls have been crimped early this year by better U.S. economic data that has prompted lower expectations from the marketplace for U.S. interest rate cuts sooner from the Federal Reserve. February gold was last down $2.20 at $2,027.10. March silver was last down $0.406 at $22.305.

Asian and European stock markets were mixed overnight. U.S. stock index futures are set to open higher and at contract and 12-month highs when the New York day session begins. The rally in the U.S. stock market has also been a negative for the precious metals, as equities are a competing asset class for gold and silver.

In overnight news, China kept its key interest rates unchanged at the PBOC central bank monetary policy meeting. That was also disappointing for the raw commodity market bulls, who want to see China’s central bank stimulate the world’s second-largest economy and a voracious consumer of raw commodities.

The key outside markets today see the U.S. dollar index slightly weaker. Nymex crude oil prices are up a bit and trading around $73.75 a barrel. Meantime, the yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.107%.

U.S. economic data due out Monday is light and includes leading economic indicators.

Technically, the gold futures bulls have the overall near-term technical advantage but are fading a bit. Prices are still in a three-month-old uptrend on the daily bar chart, but just barely. Bulls’ next upside price objective is to produce a close in March futures above solid resistance at last week’s high of $2,062.80. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. First resistance is seen at Friday’s high of $2,041.90 and then at $2,050.00. First support is seen at today’s low of $2,020.60 and then at last week’s low of $2,004.60.

The silver bears have the firm overall near-term technical advantage. Prices hit a three-month low overnight and are in a six-week-old downtrend on the daily bar chart. Silver bulls’ next upside price objective is closing March futures prices above solid technical resistance at $24.00. The next downside price objective for the bears is closing prices below solid support at the October low of $21.17. First resistance is seen at

the overnight high of $22.78 and then at $23.00. Next support is seen at the overnight low of $22.215 and then at $22.00.

Posted by :

Jack Dempsey, President

401 Gold Consultants

jdemp2003@gmail.com