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(Wallace Refiners) – Gold and silver futures prices are trading sharply up in early U.S. action Monday, with gold hitting a seven-week high. The metals are being boosted by a very anemic U.S. dollar on the foreign exchange market that saw the dollar index hit a 2.5-year low overnight. Safe-haven demand amid surging Covid-19 cases in the U.S., Europe and other parts of the world are also supporting the precious metals. The specter of rising and possibly problematic price inflation appears to be gaining some steam and boosting many raw commodity markets today. February gold futures were last up $40.90 at $1,935.70 and March Comex silver was last up $1.053 at $27.46 an ounce.
Global stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward higher openings and record highs when the New York day session begins. Trader and investor risk appetite remains upbeat on this first trading day of the new year. The marketplace continues to look over the horizon at what is hoped will be a better second-half of 2021, in both economic and human health terms. The incoming Biden administration is expected to roll out more economic aid to the public and businesses. Also, Americans began receiving their U.S. government stimulus funds late last week, which gives many struggling Americans a bit of a temporary life line.
Commodity markets are also getting a lift early this week in part on some notions the U.S. Senatorial elections in Georgia could see the Democrats win a majority in the Senate, which would make the Senate and the Congress in control of the Democrats. Such would suggest higher spending that would also likely help to stoke price inflation. However, many think it is still unlikely both Democratic senatorial candidates will win in Georgia. The vote is Tuesday.
In overnight news, the Euro zone December manufacturing purchasing managers index (PMI) came in at 55.2 versus 53.8 in November, but was a bit below market expectations. A reading above 50.0 suggests growth in the sector.
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 firmer and trading around $49.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note futures is currently around 0.925%.
U.S. economic data due for release Monday includes the manufacturing purchasing managers index (PMI), construction spending and the global manufacturing PMI.
Technically, the February gold futures bulls have the overall near-term technical advantage amid a price uptrend in place on the daily bar chart. Bulls gained fresh power with today’s big gains. 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 $1,900.00. First resistance is seen at the overnight high of $1,941.00 and then at $1,950.00. First support is seen at $1,925.00 and then at the overnight low of $1,906.10. Wyckoff’s Market Rating: 6.5.
March silver futures bulls have the firm overall near-term technical advantage amid a five-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 $26.00. First resistance is seen at $27.635 and then at $28.00. Next support is seen at $27.00 and then at the overnight low of $26.73. Wyckoff’s Market Rating: 7.0.
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