Modest price gains in gold at mid-week; Powell on deck

Editor’s Note: With so much market volatility, stay on top of daily news! Get caught up in minutes with our speedy summary of today’s must-read news and expert opinions. Sign up here!

(Wallace Refiners) – Gold futures prices are firmer again in early U.S. trading Wednesday. Silver prices are slightly lower. 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 $5.40 at $1,842.90 and March Comex silver was last down $0.072 at $27.33 an ounce.

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 pointed toward higher openings and record highs when the New York day session begins. 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.

The U.S. data point of the day at mid-week is the consumer price index for January, expected to come in at up 0.3% from December and up 1.5%, year-on-year. 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.

The key “outside markets” today see the U.S. dollar index trading slightly lower. Meantime, Nymex crude oil futures prices are higher and hit another 13-month high overnight, and are trading around $58.70 a barrel. The benchmark 10-year U.S. Treasury note yield is currently fetching 1.16%.

U.S. economic data due for release Wednesday includes weekly MBA mortgage applications survey, the consumer price index, real earnings, the monthly Treasury budget statement and the weekly DOE liquid energy stocks report.

Technically, the February gold futures bears have the slight overall near-term technical advantage amid a four-week-old price downtrend still in place on the daily chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at $1,878.80. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,771.30. First resistance is seen at this week’s high of $1,849.50 and then at $1,865.00. First support is seen at Tuesday’s low of $1,830.30 and then at this week’s low of $1,807.30. Wyckoff’s Market Rating: 4.5

March silver futures bulls have the overall near-term technical advantage. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the February high of $30.35 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 Tuesday’s low of $27.13 and then at $27.00. Wyckoff’s Market Rating: 6.0.