Gold firmer amid friendly outside markets

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(Kitco News) – Gold futures prices are modestly higher at midday Wednesday, supported by positive outside markets that include a weaker U.S. dollar index and higher crude oil prices. Silver prices are weaker. The two precious metals markets have stabilized so far this week, but traders are still looking for the next catalyst to break prices out of their near-term trading ranges. April gold futures were last up $6.00 at $1,843.70 and March Comex silver was last down $0.232 at $27.17 an ounce.

The key outside markets today see the U.S. dollar index trading slightly lower on some downside corrective pressure after hitting a two-month high last week. Meantime, Nymex crude oil futures prices are higher and hit another 13-month high today, and are trading around $58.70 a barrel. The benchmark 10-year U.S. Treasury note yield is currently fetching 1.16%.

The U.S. data point of the day at mid-week was the consumer price index for January, which came in at up 0.3% from December and up 1.4%, year-on-year. Those numbers were in line with market expectations. Despite the “reflation trade” being in favor in the marketplace at present, data from most major economies does not show inflation numbers even close to being problematic.

Another U.S. marketplace feature Wednesday is Fed Chairman Jerome Powell’s speech to the Economic Club of New York at 2:00 p.m. eastern time. His comments will be closely scrutinized for clues on the future direction of U.S. monetary policy.

Global stock markets were mostly higher overnight. China’s Shanghai stock index hit a 5.5-year high, on the last day of trading before the Chinese Lunar New Year holiday begins. U.S. stock indexes are mixed at midday and did hit record highs earlier today. Upbeat trader and investor attitudes this week continue to drive share prices up, which has also constrained the safe-haven metals bulls. New Covid-19 cases and hospitalizations in the U.S. are declining, vaccinations are ramping up, and the U.S. Congress is likely to pass a big financial stimulus package for Americans by the time spring arrives. Corporate earnings reports have also been generally positive lately.

Technically, April gold futures bears still have the slight overall near-term technical advantage. Prices are still in a four-week-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,878.90. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the February low of $1,784.60. First resistance is seen at today’s high of $1,856.60 and then at $1,865.00. First support is seen at today’s low of $1,834.00 and then at $1,821.30. Wyckoff’s Market Rating: 4.5

March silver futures bulls still have the overall near-term technical advantage and are working to restart a price uptrend on the daily chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the February high of $30.25 an ounce. The next downside price objective for the bears is closing prices below solid support at $25.00. First resistance is seen at this week’s high of $27.875 and then at $28.00. Next support is seen at today’s low of $26.88 and then at $26.50. Wyckoff’s Market Rating: 6.0.

March N.Y. copper closed up 520 points at 377.20 cents today. Prices closed nearer the session high today and hit a contract and eight-year high. The copper bulls have the strong overall near-term technical advantage and gained more power today. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at 390.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 360.00 cents. First resistance is seen at today’s contract high of 379.55 cents and then at 382.50 cents. First support is seen at today’s low of 371.40 cents and then at Tuesday’s low of 366.70 cents. Wyckoff’s Market Rating: 9.0.