Price rebounds for gold, silver; risk aversion recedes

(Kitco News, Tues. Dec. 21st, 2021) – Gold and silver prices are up in early U.S. trading Tuesday, on corrective bounces after losses posted Monday. A rebound in the crude oil market today and a weaker U.S. dollar index are friendly outside market forces supporting the metals. However, the better risk appetite in the marketplace will likely limit further upside in the safe-haven metals today. February gold was last up $3.30 at $1,798.00 and March Comex silver was last up $0.469 at $22.76 an ounce.

Global stock markets were mostly higher in overnight trading. U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins. The global stock indexes are posting corrective bounces after Monday’s strong losses that were due mostly to worries about the pandemic starting to surge again. A look at the daily bar charts for the Nasdaq and S&P futures shows higher daily price volatility at higher price levels. That’s one warning signal of a topping process in a market and favors the bearish camp. Look for more daily increased price volatility in the near term, which could be amplified even more by thin holiday trading volumes in the coming days.

Many battery metals to settle lower in 2022

Part of the bounce-back in stock indexes Tuesday comes from reports President Biden and Sen. Joe Manchin held a phone conversation, which the White House believes could keep the door open to reviving talks on Biden’s spending bill. Presently, traders and investors are looking at the bright side of the matter, as both sides are still talking.

The key “outside markets” today see Nymex crude oil prices higher on a corrective bounce from Monday’s steep losses, and trading around $69.50 a barrel. The U.S. dollar index is slightly lower early today. Meantime, the yield on the U.S. Treasury 10-year note is presently fetching 1.429%. For perspective, the 10-year German bond (bund) sees its yield at -0.362% and the 10-year U.K. bond (gilt) is fetching 0.798%. The premium the U.S. 10-year note yield is holding to most of its major counterparts is a main reason for the U.S. dollar’s appreciation in recent months. In fact, one report last week said many European banks are taking their excess Euros and buying U.S. Treasuries, which means they have to buy greenbacks with their Euros to do such—meaning even more dollar appreciation.

U.S. economic data due for release Tuesday is again light and includes the weekly Johnson Redbook and chain store retail reports.

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Technically, February gold futures bulls have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $1,825.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,775.00. First resistance is seen at this week’s high of $1,804.60 and then at last week’s high of $1,815.70. First support is seen at this week’s low of $1,789.00 and then at $1,775.00.

The March silver bears have the overall near-term technical advantage. However, a four-week-old price downtrend on the daily bar chart has been negated to suggest a market bottom is in place. Silver bulls’ next upside price objective is closing December futures prices above solid technical resistance at $23.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $21.00. First resistance is seen at $23.00 and then at $23.25. Next support is seen at the overnight low of $22.185 and then at $22.00.

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com