Gold, silver see price pressure amid higher USDX, rising Treasury yields
(Jan 3) Gold and silver futures prices are solidly lower and hitting daily lows in early U.S. dealings on this first trading day of 2022. Bearish daily elements that include a higher U.S. dollar index, weaker crude oil prices and rising U.S. Treasury yields are negatives for the precious metals. Also, mostly higher stock indexes overnight suggest low trader and investor risk aversion in the marketplace at present—and that's bearish for the safe-haven metals. February gold futures were last down $18.90 at $1,810.00 and March Comex silver was last down $0.477 at $22.995 an ounce.
Global stock markets were mostly firmer overnight. Markets in China, Japan and Australia were closed. U.S. stock indexes are pointed toward higher openings when the New York day session begins. The S&P 500 stock index gained 27% in 2021, while notching 70 record highs on the year.
While there is little risk aversion in the marketplace at present, some market analysts believe 2022 will be a rockier year for the stock markets, what with rising inflation, central banks reining in their heretofore easy money policies, and the globe still doing battle with the pandemic. There are also lingering geopolitical issues that could quickly move to the front burner of the marketplace, such as Russia's troop build-up on its Ukrainian border, and China's property market bubble that may be bursting.
The key "outside markets" today see Nymex crude oil futures prices down and trading around $75.00 a barrel. The U.S. dollar index is higher early today. The yield on the U.S. 10-year Treasury note is presently fetching 1.541%. U.S. bond yields have been on the rise for three weeks.
U.S. economic data due for release Monday includes the U.S. manufacturing purchasing managers index (PMI) and construction spending.
Technically, the February gold futures bears have the overall near-term technical advantage amid a three-week-old price downtrend in place on the daily chart. However, the bulls need to show fresh power soon to keep it alive. Bulls' next upside price objective is to produce a close in February futures above solid resistance at $1,840.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,785.00. First resistance is seen at $1,821.60 and then at $1,850.00. First support is seen at $1,800.00 and then at $1,789.10. Wyckoff's Market Rating: 6.0
March silver futures bears have the overall near-term technical advantage, but bulls are still working on a price uptrend and need to show fresh power soon to keep it alive. 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 $22.00. First resistance is seen at today's high of $23.44 and then at the December high of $23.48. Next support is seen at last week's low of $22.60 and then at $22.50. Wyckoff's Market Rating: 4.0.
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