Gold gains, silver as USDX, bond yields fall

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(Kitco News) – Gold and silver prices are solidly higher, hitting a two-week high in early US trade Wednesday. The major outside markets are working in favor of the precious metals bulls midweek as the US Dollar Index is lower, US Treasury yields are lower and Crude Oil prices are higher. Gold in December was last up $15.50 to $1,673.50 and silver was last up $0.231 to $19.58 in December.

Importantly, there are some recent short-term technical developments that now suggest that the US Dollar Index has made significant tops and US equity indices have made significant lows. Extrapolated, this could also mean inflation is peaking and the Federal Reserve is closer to the finish line on its aggressive monetary tightening stance. All of this could also mean that the US and/or the global economy could be able to avoid a serious recession. While these are just projections for now, precious metals traders seem to be picking up on these early chart clues and anticipating not only that the greenback may have peaked, but also that it could mean better consumer and trade demand for the metals markets going forward Months.

Global equity markets were mixed overnight. US stock indices headed for weaker opens as the New York session gets underway. US stock indexes hit a five-week high on Tuesday. Price uptrends on the daily bar charts have been negated and young price uptrends are now in place. Technical evidence is mounting that US stock indices have hit market bottoms. Stock traders’ focus this week is on company earnings reports.

There was no major market news overnight.

Major outside markets are seeing the US Dollar Index lower today. Nymex crude oil prices are higher and are trading around $86.25 a barrel. The 10-year US Treasury yields 4.067%.

US economic data due for release on Wednesday includes the weekly mortgage applications survey, economic indicators ahead, new home sales and the weekly DOE liquid energy stocks report.

Technically, the gold futures bears have the firm short-term overall technical advantage. However, in the short term, further upward price action would form a bullish double bottom reversal pattern, which would suggest that a major market bottom is in place. The bulls’ next upside target is to find a close above the solid resistance at $1,700.00. Bears’ next short-term downside target is to push futures prices below the solid technical support at $1,600.00. Initial resistance is seen at today’s high of $1,679.40 and then $1,700.00. Initial support is seen at today’s low of $1,653.80 and then this week’s low of $1,641.20. Wyckoff’s market rating: 2.5

Live 24 hour silver chart [ Kitco Inc. ]

The silver bears have the short-term overall technical advantage. However, recent price action suggests that a market bottom has been reached. The silver bulls next upside target is a close above solid technical resistance at the October high of $21.31. The next downside target for the bears is a close below the solid support at the September low of $17.40. Initial resistance is seen at the overnight high of $19.765 and then $20.00. Next support is seen at the overnight low of $19.18 and then $19.00. Wyckoff’s market rating: 3.0.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of the author Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. It is not an invitation to exchange goods, securities or other financial instruments. Kitco Metals Inc. and the author of this article assume no responsibility for any loss and/or damage resulting from the use of this publication.

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