Safe-haven demand fuels price gains for gold, silver

(Kitco News, Mon. Jan. 29th, 2024) – Gold and silver prices are higher in early U.S. trading Monday, on safe-haven buying after a terrorist strike in Jordan killed three U.S. soldiers. February gold was last up $11.50 at $2,028.80. March silver was last up $0.288 at $23.16.

Risk aversion is keener to start the trading week after an Iran-backed Houthi drone strike against U.S. troops in Jordan killed three U.S. soldiers. President Biden said the U.S. would respond.

Asian stock markets were mostly up and European stock markets were mixed overnight. U.S. stock index futures are set to open mixed when the New York day session begins.

In other overnight news, reports said a Hong Kong court has issued a liquidation order on China’s Evergrande Group after the property development company failed to reach an agreement with its creditors. The liquidation will be closely watched by the marketplace. Bloomberg reported most of Evergrande’s assets are located in mainland China with the order to test the legal reach of Hong Kong courts.

The U.S. economic data point of the week is the Open Market Committee meeting of the Federal Reserve that begins Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chairman Jerome Powell. The FOMC is not expected to change U.S. monetary policy at this meeting but will likely give fresh guidance on futures policy plans.

The key outside markets today see the U.S. dollar index a bit firmer. Nymex crude oil prices are near steady and trading around $78.00 a barrel. Meantime, the yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.107%.

U.S. economic data due for release Monday is light and includes the Texas manufacturing outlook survey.

Technically, the gold futures bulls have the slight overall near-term technical advantage but have faded. A three-month-old uptrend on the daily bar chart has been negated and prices are now in a seven-week-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in March futures above solid resistance at $2,050.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. First resistance is seen at the overnight $2,033.20 and then at last week’s high of $2,039.30. First support is seen at the overnight low of $2,018.80 and then at the January low of $2,004.00.

The silver bears have the overall near-term technical advantage. Prices are in a seven-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 $23.25 and then at $23.50. Next support is seen at the overnight low of $22.905 and then at $22.465.

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com