Price pauses for gold, silver as FOMC on deck

(Kitco News, Tues.  Jan. 25th, 2022) – Gold and silver futures prices are trading not far from unchanged in early U.S. trading Tuesday, just ahead of a key U.S. Federal Reserve meeting. It’s still a general “risk-off” trading mentality in the marketplace early this week, and that’s limiting selling interest in the safe-haven metals markets. February gold futures were last down $0.60 at $1,841.10 and March Comex silver was last down $0.02 at $23.77 an ounce.

The U.S. data point of the week will be the Federal Reserve’s Open Market Committee (FOMC) meeting that begins Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chairman Jerome Powell. It’s expected the Fed will raise U.S. interest rates at its March FOMC meeting. The marketplace appears to be getting more anxious regarding how the Fed is going to deal with rising and even problematic price inflation. Most believe at this FOMC meeting the Fed and Chairman Powell will better lay the groundwork for four U.S. interest rate increases this year.

Global stock markets were mixed overnight, with Asian shares mostly down and European shares mostly up. U.S. stock indexes are pointed toward lower openings when the New York day session begins. The major U.S. indexes hit seven-month lows on Monday. Serious near-term technical damage has been inflicted upon the U.S. stock indexes, to suggest they have at put in near-term market tops. However, the big rebounds from Monday’s strong losses in the U.S. indexes and the closes nearer the daily highs does suggest the stock market bears are now exhausted.

Hedge funds got caught with their bearish bets on gold

Risk aversion remains elevated early this week. Russia appears poised to invade Ukraine. NATO allies are responding by sending arms to Ukraine and putting NATO troops on higher alert, including some U.S. troops. The situation appears to be getting graver by the day.

The key outside markets today see crude oil prices firmer and trading around $84.00 a barrel. The U.S. dollar index is higher early today. The U.S. Treasury 10-year note yield is presently fetching 1.778%.

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store retail sales reports, the monthly house price index, the S&P Core-Logic housing indexes, the Richmond Fed business survey, and the consumer confidence index.

Technically, the February gold futures bulls have the firm overall near-term technical advantage amid a five-week-old 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 $1,881.90. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at this week’s high of $1,844.90 and then at the January high of $1,848.50. First support is seen at the overnight low of $1,834.40 and then at this week’s low of $1,829.30.

March silver futures bulls have the overall near-term technical advantage. Prices are in a five-week-old uptrend on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the November high of $25.54 an ounce. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at the overnight high of $24.045 and then at this week’s high of $24.36. Next support is seen at this week’s low of $23.595 and then at $23.48.

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com