Gold ends day with modest gains, but up $373 on year

Wallace Refiners has launched its 2021 Outlook, which offers the most comprehensive coverage of precious metals markets in the new year. Trillions of dollars were pumped into financial markets in 2020 and that won’t come without consequences. Economists expect that investors will be Bracing For Inflation in 2021.

(Wallace Refiners) – Gold prices ended a quiet last trading session of the year with just modest gains, but for the whole of 2020 the yellow metal appreciated by around $373, basis nearby Comex futures. Silver prices fell slightly on Thursday but for 2020 gained around $8.50 an ounce, basis nearby Comex futures. The metals recently have been supported by a slumping U.S. dollar on the foreign exchange market that saw the U.S. dollar index hit a 2.5-year low today. However, rallying stock markets that see the U.S. indexes near record highs to close out the year did squelch buying interest in the safe-haven metals the past several weeks. February gold futures were last up $3.90 at $1,897.30 and March Comex silver was last down $0.138 at $26.435 an ounce.

Global stock markets were mixed overnight. Asian shares were mostly up but European shares were pressured by new business restrictions imposed by the U.K. in an effort to thwart still-rising Covid-19 cases. U.S. stock indexes are slightly down at midday. Markets are closed for the New Year holiday on Friday.

In overnight news, China’s saw a tenth month in a row of expanding manufacturing growth. The official manufacturing purchasing managers index (PMI) rose to 51.9 in December versus 52.1 in November. China’s non-manufacturing PMI for December came in at 55.7 from 56.4 in November. A reading above 50.0 suggests expansion in the sector. This news is positive for the precious metals markets as China is a major consumer of metals.

The U.S. dollar index is higher at midday after hitting another 2.5-year low overnight. The other important outside market sees February Nymex crude oil futures prices a bit weaker and trading around $48.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note futures is currently around 0.92%.

Technically, the February gold futures bulls have the overall near-term technical advantage amid a price uptrend still in place on the daily bar chart. Bulls continue to show just enough power to keep the near-term price uptrend alive. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at the November high of $1,973.30. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,820.00. First resistance is seen at today’s high of $1,904.90 and then at the December high of $1,912.00. First support is seen at today’s low of $1,889.10 and then at this week’s low of $1,873.00. Wyckoff’s Market Rating: 6.0

March silver futures bulls have the firm overall near-term technical advantage amid a four-week-old price uptrend in place on the daily chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the December high of $27.635 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 $26.98 and then at $27.635. Next support is seen at today’s low of $26.40 and then at $26.26. Wyckoff’s Market Rating: 6.5.