Price Pressure on Gold, Silver as Greenback Surging

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Feb 04, 2021 11:25 NY TimeKitco 10AM Silver Fix

(Kitco News) – Gold and silver futures prices are trading lower in early U.S. dealings Thursday, due in part to a strengthening U.S. dollar index that hit a two-month high overnight. Gold prices hit a two-week low. Also, the U.S. stock market bulls have made a strong recovery this week as the indexes are trading near their recent record highs—a negative for the safe-haven metals. April gold futures were last down $15.30 at $1,819.60 and March Comex silver was last down $0.244 at $26.635 an ounce. 

Global stock markets were mixed overnight, with Asian shares mostly down and European shares slightly up. U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins and have made strong recoveries after the recent declines. U.S. stock index prices are near their recent record highs as trader/investor risk sentiment is upbeat this week. The Biden administration is working to get fresh stimulus funds to Americans and such will likely occur in the coming weeks.

In overnight news, the United Nations’ Food and Agriculture Organization said its food price index rose to the highest level in nearly seven years. That’s another early clue that consumer and producer price inflation could heat up in the coming months.

On tap today is a busy slate of U.S. economic data highlighted by the weekly jobless claims report, expected to show around 830,000 new claims in the latest week, compared to 847,000 filed last week. Traders are looking ahead to Friday morning’s U.S. employment situation report for January, which is expected to show a non-farm payrolls rise of 50,000 and an unemployment rate of 6.7%.

The key “outside markets” today see the U.S. dollar index higher and hitting a two-month high overnight. Meantime, Nymex crude oil futures prices are higher and near this week’s 12-month high, trading around $56.15 a barrel. The yield on the benchmark 10-year U.S. Treasury note stands at 1.136%.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, preliminary productivity and costs, manufacturers’ shipments and orders, and monthly chain store sales.

Technically, the February gold futures bears have gained the overall near-term technical advantage and are working on a price downtrend on the daily chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at $1,900.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the January low of $1,804.70. First resistance is seen at the overnight high of $1,835.70 and then at Wednesday’s high of $1,845.90. First support is seen at today’s low of $1,811.00 and then at $1,804.70.

March silver futures bulls still have the overall near-term technical advantage but have faded this week. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the January high of $28.105 an ounce. The next downside price objective for the bears is closing prices below solid support at $25.00. First resistance is seen at the overnight high of $27.015 and then at $27.26. Next support is seen at the overnight low of $26.33 and then at $26.00

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com