Price advances for gold, silver on corrective rebounds

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(Wallace Refiners) – Gold and silver futures prices are moderately higher in early U.S. trading Tuesday, on upside price corrections after big losses last Friday were likely overdone on the downside. There is also some safe-haven demand featured this week due to potential storm clouds on the horizon. February gold futures were last up $8.60 at $1,859.30 and March Comex silver was last up $0.211 at $25.505 an ounce.

Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Traders and investors are weighing the positives of the likely end to the surge of the Covid-19 pandemic by springtime and vaccinations shifting into high gear, as well as big U.S. government spending programs being implemented by the Democrat-controlled Congress, against the uncertainties that lie just ahead: a possible Trump impeachment, potential civil unrest in the U.S. in the next couple weeks, and the pandemic in the U.S. and other nations still being at or close to its deadliest.

A feature in the marketplace just recently has been rising U.S. Treasury yields. Read that rising interest rates. The benchmark U.S. 10-year Treasury note yield is currently fetching 1.16%. For more than a decade Americans have not had to worry about high interest rates. Make no mistake, U.S. bond yields at present are nowhere near worrisomely high levels that might suggest high inflation. However, it’s the trajectory of the yields that is raising eyebrows and merits continued close observation. High inflation is usually the enemy of the stock markets and the friend of commodity markets.

The key “outside markets” today see the U.S. dollar index near steady. Meantime, Nymex crude oil futures prices are higher, hit a 10-month high overnight, and are trading around $53.00 a barrel.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the NFIB small business index, USDA supply and demand reports, and the IDB/TIPP economic optimism index.

Technically, the February gold futures bulls and bears are on a level overall near-term technical playing field. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at the January high of $1,962.50. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,767.20. First resistance is seen at the overnight high of $1,864.00 and then at $1,875.00. First support is seen at the overnight low of $1,841.00 and then at last week’s low of $1,827.80. Wyckoff’s Market Rating: 5.0

March silver futures bulls and bears are on a level overall near-term technical playing field. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the January high of $28.105 an ounce. The next downside price objective for the bears is closing prices below solid support at the November low of $21.96. First resistance is seen at the overnight high of $25.745 and then at $26.00. Next support is seen at today’s low of $25.00 and then at this week’s low of $24.365. Wyckoff’s Market Rating: 5.0.