Tag: buy gold

Gold, silver rally as traders buy the early dip

Gold, silver rally as traders buy the early dip

JGold and silver futures prices are modestly up in midday U.S. trading Tuesday. Overnight losses were deemed by the precious metals bulls to be a bargain buying opportunity. Otherwise, some routine backing and filling on the charts has been featured as fresh fundamental inputs are awaited. April gold futures were last up $6.70 at $1,828.50 and March Comex silver was last up $0.154 at $23.23 an ounce.

Global stock markets were mixed overnight. U.S. stock indexes are higher at midday. Corporate earnings reports are in the spotlight at present. While earnings reports have been mostly upbeat, some have not, including a few big companies. That and inflation worries are making the U.S. stock indexes wobbly. More and more, it’s looking like the Federal Reserve will be aggressive and raise the Fed funds rate by 0.5% at its March meeting. Historically, rising interest rates and rising inflation have been bearish for stock markets and bullish for the metals markets.

The U.S. data point of the week will be Thursday morning’s consumer price index report for January, expected to come in at up 7.2%, year-on-year. That would be a hot reading if the CPI number meets market expectations.

From one of the worst to best-performing assets? Gold price to tackle $2,100 by year-end, says Wells Fargo

The key outside markets today see crude oil prices lower and trading around $89.50 a barrel after prices last Friday hit a seven-year high. The U.S. dollar index is firmer early today. The U.S. Treasury 10-year note yield is presently fetching 1.954%, which is near a three-year high.

Technically, the April gold futures bulls have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at the January high of $1,856.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the December low of $1,755.40. First resistance is seen at this week’s high of $1,824.60 and then at $1,835.00. First support is seen at this week’s low of $1,807.50 and then at $1,800.00. Wyckoff's Market Rating: 6.0

March silver futures bears have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $24.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the December low of $21.41. First resistance is seen at this week’s high of $23.11 and then at $23.48. Next support is seen at this week’s low of $22.50 and then at $22.25. Wyckoff's Market Rating: 3.0.

Technically, April gold futures prices hit a two-week high today. Bulls have the overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at the January high of $1,856.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the January low of $1,780.60. First resistance is seen at $1,835.40 and then at $1,850.00. First support is seen at today’s low of $1,816.00 and then at this week’s low of $1,807.50. Wyckoff's Market Rating: 6.5

March silver futures bears have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $24.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the December low of $21.41. First resistance is seen at $23.48 and then at $23.75. Next support is seen at $23.00 and then at today’s low of $22.77. Wyckoff's Market Rating: 4.0.

March N.Y. copper closed down 140 points at 444.85 cents today. Prices closed near mid-range today. The copper bulls have the slight overall near-term technical advantage amid recent choppy trading. 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 the January low of 428.20 cents. First resistance is seen at today’s high of 448.40 cents and then at this week’s high of 451.95 cents. First support is seen at today’s low of 439.50 cents and then at 437.00 cents. Wyckoff's Market Rating: 5.5.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips

 

David

What’s the catalyst to take gold price to $1,900?

What's the catalyst to take gold price to $1,900?

Now that gold is sitting comfortably above $1,700 an ounce, is it ready for liftoff towards $1,900? Analysts remain optimistic but say that the precious metal needs a new catalyst to get it there.

After an eventful week, gold managed to stay above $1,720 an ounce. The precious metal even attempted to break the key resistance level of $1,750 on Thursday. And even though the move up failed, June Comex gold futures were last trading at $1,733.90, up 0.38% on the day.

"Factors that would normally weigh on gold, such as rising stock markets and the firm U.S. dollar, do not appear to be pressuring its price all that much at present," said Commerzbank analyst Eugen Weinberg.

This trading pattern could be a sign that it's time to start picking up gold, RJO Futures senior commodities broker Daniel Pavilonis told Kitco News.

"Market sentiment is low compared to where it was back in August. This is a good sign. It is probably the time to start picking up gold. Next week, we could see more of an up week for gold," Pavilonis said.

Gold is being pulled by two different outlooks — the short-term risk-on view, which is based on vaccinations and the economic recovery, and the long-term risk-off view, which is filled with uncertainty and an accommodative Federal Reserve.

"I'm not surprised we are not breaking to the upside yet. The U.S. dollar continues to be firm. It will be firm for the next little while as Europe is shutting down after failures with vaccine distribution. Flows of funds are likely to skew to the U.S.," said TD Securities head of global strategy Bart Melek.

In the long-term, however, there is uncertainty, Melek pointed out. "We happen to think we break out into $1,900 by year-end because we will see inflation and no action from the Federal Reserve," he said. "Also, we'll have more debt and more infrastructure spending."
 

Potential catalysts

Yet, gold is unlikely to surge until there is a new catalyst, according to analysts.

"Gold appears comfortable at current price levels. Physical demand offers a cushion on the downside, but a macro catalyst to drive upside risk is absent," said Standard Chartered precious metals analyst Suki Cooper.

One such catalyst could be gold's break from 10-year Treasury yields. Recently, gold has been dragged down whenever yields would go up. But that inverse relationship could break, which would help gold breakout, Pavilonis said.

"Rates are going up a bit today, and gold is holding well. It is a positive sign. Maybe we start to snap free of the correlation that if rates go up, gold has to go down. If we can deviate away from that with the announcement of Biden's new infrastructure package, it will be good for gold," he said. "When we see inflation, it is time to buy gold."

With more money printing and more accommodative policies out there, inflation will kick in, and the February low could be the bottom in gold, Pavilonis noted. "The longer we see sideways price action in gold, the more the path of least resistance becomes to the upside," he said.

Another catalyst could be the U.S. dollar finally losing steam. "As the year unfolds, the USD resumes its downtrend, and real yields remain negative, prices are likely to regain traction," Cooper said.

Also, there are a number of risks that could flare up, affecting investors' risk appetite, said FXTM market analyst Han Tan.

"From signs that COVID-19 cases are making a resurgence globally to simmering U.S.-China tensions, amid the shifting expectations for the Fed's policy outlook, the relative calm in markets could yet be upended by the realization of such risks," Tan stated.
 

What to watch next week

The biggest data release is slated for Friday — the latest employment data. Market consensus is for the U.S. economy to have added 655,000 jobs in March. The U.S. ISM manufacturing PMI and jobless claims are scheduled for Thursday, while ADP employment data are going to be released on Wednesday.

Markets will also be watching the U.S. house price index on Tuesday and pending home sales on Wednesday. The U.S. markets will be closed for Good Friday.

Aside from macroeconomic data, investors will be keeping a close eye on the rhetoric from Washington, any new stimulus announcements, and the number of global COVID-19 cases.

"With the ink on the $1.9tn fiscal relief plan barely dry, next week sees President Joe Biden push ahead with the $3tn Build Back Better green energy and infrastructure plan," said ING economists. "The difficulty will be getting it passed by Congress, given the need for 60 Senators putting it forward for a vote … It may need to be broken up into smaller packages and diluted to some extent should Republicans put up stiff opposition. It is not going to be an easy sell."

 

By Anna Golubova

For Kitco News

Buy, Trade, Gold. Earn yields, free storage

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