Gold, silver see price gains amid keener risk aversion

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 moderately higher in early U.S. trading Monday. The safe-haven metals are catching a bid to start the trading week as there are now more cross-currents in the marketplace than seen recently. Some perceived bargain hunting is also featured in gold and silver after their prices scored sharp declines last Friday. February gold futures were last up $7.40 at $1,842.80 and March Comex silver was last up $0.278 at $24.915 an ounce.

Global stock markets were mostly weaker overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. Trader and investor risk appetite is dented to start the trading week. A downbeat U.S. unemployment report last Friday and the aftermath of the U.S. Capitol riot have combined with the still-raging Covid-19 pandemic are weighing on the marketplace. The trading and investment climate “is a little bumpier” than at this time last week, said one market analyst.

The key “outside markets” today see the U.S. dollar index solidly up. Said one market analyst in a morning email dispatch: “ Shorting the dollar was the most recommended trade in currency markets heading into 2021. However, rising (U.S. government bond) yields could now lead to a rethinking of this strategy. If the yield curve becomes steeper and differentials become much wider, expect to see a strong recovery in the dollar despite the new billions in expected stimulus. According to the latest CFTC data, we are already seeing a trimming of long positions in major currencies (futures) against the greenback.”

Meantime, Nymex crude oil futures prices are weaker and are trading around $51.75 a barrel. Profit taking is featured after crude oil prices last Friday hit a 10-month high.

The benchmark U.S. 10-year Treasury note yield is currently fetching 1.103%.

U.S. economic data due for release Monday is light and includes the employment trends index.

Technically, the February gold futures bulls have lost their overall near-term technical advantage and are fading. A five-week-old price uptrend on the daily bar chart has been negated. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at last week’s 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 $1,856.00 and then at $1,875.00. First support is seen at the overnight low of $1,817.10 and then at $1,800.00. Wyckoff’s Market Rating: 5.0

March silver futures bulls have lost their overall near-term technical advantage as a five-week-old price uptrend on the daily chart has been negated. Silver bulls’ next upside price objective is closing prices above solid technical resistance at last week’s 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 $25.595 and then at $26.00. Next support is seen at today’s low of $24.365 and then at $24.00. Wyckoff’s Market Rating: 5.0.