Gold slightly down Tuesday but silver sharply up, hits 7-week high

Gold futures prices are a bit lower in midday U.S. trading Tuesday. The yellow metal sees some price pressure from rising government bond yields and a stronger U.S. dollar index on this day. Meantime, silver hit a seven-week high and the bulls have started a near-term price uptrend in the metal. Some keener risk appetite in the marketplace early this week is supportive for the safe-haven metals. February gold futures were last down $2.50 at $1,813.90 and March Comex silver was last up $0.557 at $23.47 an ounce.

Global stock markets were mostly weaker overnight. U.S. stock indexes are solidly lower at midday, on risk aversion after a three-day holiday weekend. Crude oil prices pushed to a seven-year high today after the United Arab Emirates was hit by a deadly drone attack on its capital. While the damage was limited, the strikes by Yemen's Iranian-backed Houthi rebels reminds how vulnerable oil producers are to attack from drones. Nymex crude oil futures prices and trading around $85.25 a barrel. North Korea is also making geopolitical noise by test-firing missiles.

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Bond yields are also on the rise this week. The U.S. Treasury 10-year note is presently yielding 1.856%–the highest level in two years. Traders and investors are sensing that inflationary pressures will get worse before they get better. Rising inflation should be ultimately bullish for the metals markets. Meantime, the U.S. dollar index is making a good rebound Tuesday, after hitting a two-month low last Friday.

In other news, China cut its main interest rates to prop up the world's second-largest economy. This comes as other major central banks of the world are tightening their monetary policies. China President Xi Jinping at the Davos virtual economic summit warned major industrial nations not to raise interest rates too quickly, which could choke the global economic recovery.

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 $1,850.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the January low of $1,781.30. First resistance is seen at today's high of $1,822.90 and then at last week's high of $1,829.30. First support is seen at today's low of $1,804.70 and then at $1,800.00. Wyckoff's Market Rating: 6.0

March silver futures prices hit a seven-week high today and scored a bullish "outside day" up. The silver bulls and bears are back on a level overall near-term technical playing field. However, a four-week-old uptrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $25.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the January low of $21.945. First resistance is seen at today's high of $23.68 and then at $24.00. Next support is seen at $23.00 and then at today's low of $22.82. Wyckoff's Market Rating: 5.0.

March N.Y. copper closed down 295 points at 439.10 cents today. Prices closed nearer the session low today. The copper bulls have the overall near-term technical advantage but are fading. Prices are still in a four-week-old uptrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the January high of 460.10 cents. The next downside price objective for the bears is closing prices below solid technical support at 425.00 cents. First resistance is seen at today's high of 444.90 cents and then at 448.00 cents. First support is seen at today's low of 438.10 cents and then at 435.00 cents. Wyckoff's Market Rating: 6.0.

By Jim Wyckoff

For Kitco News

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