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 and silver futures prices are trading modestly up in early U.S. action Thursday. The metals are being 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 overnight. Gold will exit 2020 with its best year ever after hitting a record high in August, with silver seeing its best year in eight years. February gold futures were last up $3.90 at $1,897.30 and March Comex silver was last up $0.052 at $26.625 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 pointed toward slightly higher openings when the New York day session begins. Look for a quieter marketplace Thursday, on this last trading day of the week, of the month, of the quarter and of the year. Markets are closed for the New Year holiday on Friday.
The highlight of the U.S. trading session will likely be the release of the weekly U.S. jobless claims data, likely to show new claims just north of 800,000.
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 lower and hit another 2.5-year low in early U.S. trading. The other important outside market sees February Nymex crude oil futures prices weaker and trading around $48.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note futures is currently around 0.923%.
U.S. economic data due for release Thursday is light and includes the weekly jobless claims report.
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 the overnight high of $1,904.90 and then at the December high of $1,912.00. First support is seen at the overnight 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 the overnight low of $26.49 and then at $26.26. Wyckoff’s Market Rating: 6.5.
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