Gold and Silver see gains as US Dollar Index slides, Crude Oil rises
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(Kitco News) – Gold and silver prices are higher in early US trade Tuesday, helped on the day by a lower US Dollar Index and higher crude oil prices. US Treasury yields are only slightly down today and that is also favorable for safe-haven metals. Gold in December was last up $8.10 to $1,747.70 and silver was up $0.403 to $21.275 in December.
Global equity markets were mixed overnight. US stock indices headed for slightly higher opens as the New York session gets underway. Risk appetite remains muted earlier this week as Covid cases surge in China. News reports call China’s largest city Beijing a “ghost town”. Some analysts say 20% of China’s economy will be negatively impacted by the Covid lockdowns.
Wednesday will be the busiest day for US economic data, including minutes from the FOMC’s final monetary policy meeting, which will be released early this afternoon. A headline from Barron’s today reads, “Don’t turn off the holidays; Fed minutes will be a must.” The minutes could contain new clues about the future path and timing of Fed monetary policy.
Major outside markets are seeing the US Dollar Index lower today on a corrective pullback from solid earnings announced on Monday. Nymex crude prices are firmer, trading around $80.50 a barrel. The crude oil market was roiled on Monday by reports that Saudi Arabia is considering increasing its crude oil production – only for Saudi officials to deny the report. Oil prices fell to an 11-month low shortly after the news came down the lines. The benchmark 10-year Treasury yield is currently 3.793%.
US economic data, due to be released on Tuesday, includes the weekly Johnson Redbook and chain retail indexes, as well as the Richmond Fed business survey.
Technically, the gold futures bulls and bears are on an equal technical playing field in the short term. The bulls’ next upside target is to find a close above solid resistance at the November high of $1,791.80. Bears’ next short-term downside target is to push futures prices below the solid technical support at $1,700.00. Initial resistance is seen at this week’s high of $1,755.00 and then $1,770.00. Initial support is seen at the overnight low of $1,738.90 and then this week’s low of $1,733.90. Wyckoff’s market rating: 5.0
The silver bulls have the slight short-term overall technical advantage but have faded. A choppy 2.5 month old uptrend is still present on the daily bar chart. The silver bulls next upside target is a close above the solid technical resistance at the November high of $22.38. The next downside target for the bears is a close below the solid support at $19.00. Initial resistance is seen at $21.50 and then $22.00. Next support is seen at $21.00 and then this week’s low of $20.60. Wyckoff’s market rating: 5.5.
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