Gold, silver slightly up as near-term chart postures improving

Gold and silver prices are a bit higher near midday Tuesday, with gold notching a five-week high and silver a four-week high in the early going. The two precious metals markets are seeing the bullish traders working on near-term price uptrends for both. Sharp gains in crude oil futures recently are also supporting the precious metals markets. February gold was last up $3.60 at $1,812.40 and March Comex silver was last up $0.151 at $23.14 an ounce.

Global stock markets were mostly higher overnight. U.S. stock indexes are mixed near midday and are at or near their record highs. Traders and investors continue to exhibit general “risk-on” attitudes that are bullish for the stock markets, and that is limiting the upside in the safe-haven metals. The Omicron strain of the coronavirus is proving to produce less serious illness than the other strains, while new vaccines and therapeutics are rolling out to battle the virus. “Serious but manageable” appears to be how the marketplace is viewing the matter. The U.S. Center for Disease Control has just cut in half the quarantine time for those exposed to the virus.

The key “outside markets” today see Nymex crude oil prices higher, hitting a five-week high early on, and now trading around $75.85 a barrel. The U.S. dollar index is slightly up. Meantime, the yield on the U.S. Treasury 10-year note is presently fetching 1.472%.

Technically, February gold futures bulls have the overall near-term technical advantage and are working on a near-term price uptrend. Bulls’ next upside price objective is to produce a close above solid resistance at $1,840.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,775.00. First resistance is seen at today’s high of $1,821.60 and then at $1,825.00. First support is seen at $1,800.00 and then at last week’s low of $1,785.00. Wyckoff's Market Rating: 6.5.

March silver futures bears still have the overall near-term technical advantage. However, recent price action suggests a market bottom is in place. 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 today’s high of $23.48 and then at $23.75. Next support is seen at this week’s low of $22.655 and then at $22.44. Wyckoff's Market Rating: 3.5.

March N.Y. copper closed down 310 points at 444.10 cents today. Prices closed nearer the session low and hit a four-week high early on today. The copper bulls have the overall near-term technical advantage as they are working on a near-term price uptrend. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the October high of 477.70 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 the November high of 451.15 cents and then at 455.00 cents. First support is seen at 440.00 cents and then at this week’s low of 434.50 cents. Wyckoff's Market Rating: 6.0.

By Jim Wyckoff

For Kitco News

Buy, Sell Gold and Silver, with Free Storage and Monthly Yields

 

David

Gold trades both sides of unchanged in quieter session

Gold prices are near steady in subdued midday U.S. trading Monday. Gains are being squelched by less risk aversion in the marketplace recently, while sellers of the precious metals are tepid amid rising inflation worries. February gold was last down $1.00 at $1,810.60 and March Comex silver was last up $0.115 at $23.035 an ounce.

Global stock markets were mostly weaker overnight in quieter, post-holiday trading. Some markets overseas remained closed for the Christmas holiday. U.S. stock indexes are higher and at or near record highs at midday.

There are still coronavirus worries, but there are also vaccines and drugs coming on line to battle the virus. One market analyst termed the marketplace’s present attitude regarding the coronavirus battle, “serious but manageable.”

Simmering on the back burner of the marketplace is a potential geopolitical crisis, as Russia’s troop buildup on the Ukrainian border has alarmed the U.S. and Europe.

The key “outside markets” today see Nymex crude oil prices solidly higher and trading around $75.75 a barrel. The U.S. dollar index is slightly up today. Meantime, the yield on the U.S. Treasury 10-year note is presently fetching 1.482%.

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 $1,840.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,775.00. First resistance is seen at the December high of $1,815.70 and then at $1,825.00. First support is seen at $1,800.00 and then at last week’s low of $1,785.00. Wyckoff's Market Rating: 6.0.

March silver prices hit a three-week high today. The silver bears still have the overall near-term technical advantage. However, recent price action suggests a market bottom is in place. 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 today’s high of $23.15 and then at $23.50. Next support is seen at today’s low of $22.655 and then at $22.44. Wyckoff's Market Rating: 3.0.

March N.Y. copper closed up 965 points at 448.95 cents today. Prices closed near the session high and hit a four-week high today. The copper bulls have regained the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the October high of 477.70 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 the November high of 451.15 cents and then at 455.00 cents. First support is seen at 445.00 cents and then at 440.00 cents. Wyckoff's Market Rating: 6.0.

By Jim Wyckoff

For Kitco News

Buy Gold and Silver on Dips and earn monthly yields on holdings

David

Seasonally gold price looks strong, but analysts ask if it can hold above $1,800 through the new year?

Welcome to Kitco News' 2022 outlook series. The new year will be filled with uncertainty as the Federal Reserve looks to pivot and tighten its monetary policies. At the same time, the inflation threat continues to grow, which means real rates will remain in low to negative territory. Stay tuned to Kitco News to learn from the experts on how to navigate turbulent financial markets in 2022.

Sentiment remains bullish on gold as prices head into the Christmas holidays above $1,800 an ounce; however, the advice from markets analysts is: if you don't have to trade next week, don't.

Most Wall Street analysts note that gold is starting a strong season period; however, the next two weeks will see high volatility on extremely low trading volume. Many firms have already closed their books for the year ahead of the holidays.

The low-volume environment was also reflected in the participation rate of this week's gold survey.

This week 13 Wall Street analysts participated in Kitco News' gold survey. Among the participants, nine analysts, or 69%, called for gold prices to rise next week. At the same time, bearish and neutral views garnered two votes or 15% each.

Meanwhile, a total of 638 votes were cast in online Main Street polls. Of these, 343 respondents, or 54%, looked for gold to rise next week. Another 134, or 21%, said lower, while 161 voters, or 25%, were neutral.

Pic

The continued bullish sentiment comes as gold prices look to end the shortened trading week above $1,800 an ounce, relatively unchanged from last week.
 

Most analysts are bullish on gold in the near term as December and the early months of the new year are seasonally solid periods for the precious metal.

"Nine out of the last ten years, you would have made money buying gold on the last trading day before Christmas and selling by Jan. 11," said Phillip Streible, chief market strategist at Blue Line Futures. "There is always a lot of uncertainty at the start of the year, so investors probably feel comfortable holding a little bit of gold as a safe-haven hedge."

Along with bullish seasonal factors, analysts are also optimistic on gold as its technical outlook continues to improve, with prices holding above $1,800 an ounce. However, for some analysts, gold needs to break above initial resistance at $1,815 and long-term resistance at $1,835.

Can gold price rally 15% in 2022? Here are the triggers to watch

However, not all analysts are optimistic about gold in the near term.

David Madden, market analyst at Equiti Capital, said that while gold has room to move slightly higher next week, it is difficult to be bullish as the U.S. dollar remains strong.

"The U.S. dollar hasn't broken above its November highs, but it is still in a strong uptrend, and that will weigh on gold," he said. "I wouldn't want to short the U.S. dollar when the Federal Reserve is looking to raise interest rates three times next year."

Christopher Vecchio, senior market strategist at DailyFX, said that he is neutral on gold in the near term but said that he is not optimistic about the precious metal.

"Gold lacks fundamental news to drive prices sustainable higher," he said. "With the Federal Reserve looking to raise interest rates next year, real yields should rise and that will be negative for gold."

By Neils Christensen

For Kitco News

Buy Gold and Silver on Dips and earn monthly yields on holdings

David

The bullish season for gold price begins, can gold tackle $1,850?

Gold price is looking to get a boost from a seasonably favorable time that began in mid-December. And analysts are eyeing whether the momentum will be strong enough to take gold above $1,850 an ounce — the next hurdle in the price trend.

"From a seasonal perspective, demand for physical gold is a big aid in driving prices higher from mid-December to Valentine's Day. In the next 6-8 weeks, gold and silver could thrive," Walsh Trading co-director Sean Lusk told Kitco News. "With the new variant coming in, easy money policies will remain. Granted, the Fed signaled that they would start rate hikes. But there is still a lot of uncertainty out there — global economic recovery and new geopolitical tensions."

This is why gold held the $1,780-$1,800 range, Lusk noted. At the time of writing, February Comex gold futures were ending the week at $1,809.50.

The Federal Reserve's more aggressive tapering and the potential of three rate hikes in 2022 have already been largely priced in. This means that any new fear could change the outlook and benefit gold.

"The trend is turning higher into next year. It seems like the new COVID-19 variant could give the Fed more pause on the aggressive taper and rate hikes. Geopolitical risks or a crude oil disruption could impact markets' perceptions," Lusk added.

Before committing one way or the other, investors need to make sure the current move higher in gold is not a head fake, warned RJO Futures senior market strategist Frank Cholly.

"The gold market keeps making these head fakes. It breaks out and rallies, but then the move fades quickly. I can't get too excited about gold until we hit $1,835 or maybe even above $1,850," Cholly told Kitco News.

From a technical perspective, funds don't have a strong long position in gold going into next year. And that might be changing, Lusk pointed out. Gold could challenge the $1,880 an ounce level last seen in mid-November.

"Head and shoulders could be forming, and we might start to shoot higher. We are getting higher lows. That ultimately brings about higher highs. In the near term, a spike up to $1,815 on the February contract could be hit. If we blow through that, it is clear sailing up to $1,833, and then $1,875," Lusk described.

If gold manages to close the year at $1,850, the next target would be up at around $2,000 an ounce, he added.

Tide will turn for gold price in 2022 as real yields remain low despite Fed rate hikes

Problematic inflation is one of the macro drivers that will finally kick in and help drive prices higher in 2022, said Cholly.

"There is going to be a point that gold begins to get a lift from the idea that this inflation is heating up. As we move into Q1 2022, we will see further price pressures. And when gold gets above $1,850 this time around, the path of least resistance will be higher," he noted.

Once gold is comfortably above $1,850, more people will jump in on the fear of missing out, Cholly added.

Even though the initial reaction to the Fed tapering and higher interest rates might be negative for gold, once processed, it could trigger another rally, according to Cholly.

"Often, higher rates will mean a stronger dollar. But the Fed's tightening cycle in 2022 could be bullish for gold. It may not be the initial reaction, but as inflation hits all other commodities, gold will be in demand," he said. "When prices go up, most commodities see a curb in demand. For gold, this creates demand — the fear of missing out. The inflation hedge narrative is something people are going to want."

Data during the last week of the year

It will be a fairly quiet data week because of the holidays. Some releases to keep a close eye on next week include Tuesday's CB consumer confidence, Wednesday's pending home sales, and Thursday's jobless claims.

 

By Anna Golubova

For Kitco News

 

Buy Gold and Silver on Dips and earn monthly yields on holdings

David

Gold surges past $1,800 on dollar weakness and omicron fears

Both gold and silver had significant gains resulting from a combination of dollar weakness and continued fears regarding the economic effect of the Covid-19 variant omicron.

One simply needs to view both precious metals through the eyes of the KGX (Kitco Gold Index) to see the strong effect that dollar weakness had on the precious metals complex. As of 4:08 PM, EST spot gold is currently fixed at $1804.80, which is a net gain of $15.70 on the day. On closer inspection, we can see that dollar strength contributed approximately half of today’s price search. Dollar weakness accounted for net gains of $7.90, and normal trading added $7.80, which resulted in gold surging past $1800 per ounce.

Spot silver pricing also benefited from dollar weakness today. However, in the case of silver, normal trading accounted for two-thirds of today’s net gains. The KGX showed that silver gained a total of $0.31 today and is currently fixed at $22.80. Unlike gold, silver gained $0.10 as the direct result of dollar weakness and $0.21 as the result of normal trading.

Gold futures basis the most active February 2021 Comex contract is currently up $16.50, or 0.92%, and fixed at $1805.20. Gold prices are currently very close to the intraday high of $1806.30, well off the intraday low of $1785.80.

One interesting aspect of the financial markets over the last few days has been traders focusing on the Covid-19 variant, omicron. It’s almost as if equity traders and precious metal traders have been oscillating between concerns that the variant will result in major economic contractions during the trading session or completely disregard concerns which was the case today. Traders in the U.S. equity markets disregarded any concerns regarding the variant, and precious metals chose to focus upon it.

It must be noted that we are trading during a pre-holiday period, which will continue to create volatility due to the thin volume. Concern about the spiraling level of inflation continues to be a forefront concern. However, for the most part, traders and market participants in both the equities and precious metals markets have now baked the increased amount of rate hikes expected from the Federal Reserve. Currently, market participants have factored in a total of six rate hikes, three interest rate hikes in 2022 as well as three rate hikes in 2023.

Our technical studies indicate that although gold solidly traded above the key psychological level of $1800, current pricing at $1804.70 puts it right at the 61.8% Fibonacci retracement level at $1804.60. Our studies also indicate major resistance that occurs at $1815. The first level of support is currently fixed at $1788.80 which is based upon a support trendline created from the compression triangle which occurred over the last three months (see gold chart). Below that the next support level occurs at $1784.90 which is based upon a 78% Fibonacci retracement. Major support currently resides at $1770.30 which is the 38% Fibonacci retracement based upon the longest data set used in our studies. This data set begins at the highs of $1920 that occurred during the first week of June down to $1678, the low that occurred the first week of August.
 

By Gary Wagner

Contributing to kitco.com

Buy Gold and Silver on Dips and earn monthly yields on holdings

David

Only gold and Bitcoin will protect against what's to come – Alex Mashinsky's 2022 survival guide

2022 will be a year of heightened volatility from growing fears of the latest Omicron variant, as well as rising inflation, and the chance of monetary tightening from the Federal Reserve, said Alex Mashinsky, CEO of Celsius Network.

The key is to look at which economic scenario is most likely to play out and act accordingly.

“If there’s a lot of volatility because inflation is out of control [and go into] the double digits then gold and Bitcoin are going to become safe assets. But, if we have single-digit inflation and the Fed is fighting it, then all assets are actually going to lose value because everybody is going to be hurting,” he said. “And, if the opposite…if the Fed decides that inflation is not an issue and they can accommodate longer, then all asset prices are going to go up. So, we have several scenarios here and we have to watch very carefully what happens with each print each month and make decisions based on that.”

For Mashinsky’s outlook on gold, Bitcoin, the U.S. dollar, and the future of technological innovations, watch the video above.
 

By David Lin

For Kitco News

Buy Gold and Silver on Dips and earn monthly yields on holdings

David

Gold trades under pressure back below $1800 as investors focus on Fed

As of 4:10 PM EST gold futures basis, the most active February 2021 Comex contract is currently fixed at $1789.80 after factoring in today’s net decline of $15.10 (-0.84%). Gold opened at $1800.20, traded to a high of $1804.60, and is currently trading $0.90 off the intraday low of $1789.

U.S. equities were dragged down today by concerns of the new Covid-19 variant “Omicron.” The Dow lost 433 points (-1.43%), the S&P 500 gave up 1.06%, and the NASDAQ composite declined by 1.17%. However, it seems that market participants who trade and invest in gold did not have the same concerns as in the U.S. equities markets.

Instead, market participants continue to focus upon the Federal Reserve’s plan to accelerate the tapering timeline of their asset purchases and implement rate hikes next year. According to the most recent information from the Federal Reserve, their likely course of action will be to implement three rate hikes in 2022 and an additional three rate hikes the following year in 2023. Although the rate hikes the Federal Reserve will implement will be subtle and small steps of 25 basis points (1/4%) these hikes would raise the Fed funds rate to 1 ¾ % by the end of 2023.

Our technical studies indicate strong resistance at $1815 per ounce. This is based upon intraday highs that occurred in mid-October, the end of November, and last Friday. On Friday, gold traded to an intraday high of $1815 and closed at the 61.8% Fibonacci retracement of the November rally. During the November rally gold traded from a low on November 3 of $1758 to a high of $1870.60 on November 16. These technical studies confirm that $1815 is the current level of strong resistance. The next level below that occurs between $1804.60 (the 61.8% retracement point) and $1800 per ounce, a key psychological level.

Silver experienced a strong decline today, giving up 1.17%, or a total of 26.3 cents which takes the most active Comex contract to $22.27. Our technical studies indicate support at $21.50. This is based upon two significant lows that occurred first on September 29 and then on December 15. We currently see major resistance at $23. This is based upon the 78% retracement from a data set that begins at the highs achieved in silver of $28.88 that occurred on May 17 of this year to the double bottom we spoke about at $21.50.

With the holiday season underway, we would expect to see light volume and the choppy market as we get closer to the beginning of the Christmas holiday season commencing. Then between Christmas and New Year’s we expect to see very light participation from major traders as they celebrate the holiday season.
 

By Gary Wagner

Contributing to kitco.com

Buy Gold and Silver on Dips and earn monthly yields on holdings

David