Price pressure on gold and silver despite greater risk aversion
Welcome to the Kitco News Outlook 2022 series. The new year will be marked by uncertainty as the US Federal Reserve tries to reverse and tighten its monetary policy. At the same time, the risk of inflation continues to grow, which means that real interest rates will remain in the low to negative range. Stay up to date with Kitco news to learn from the experts how to navigate turbulent financial markets in 2022.
(Kitco News) – Gold and silver prices are lower in early U.S. trading on Monday as safe havens so far have not been able to capitalize on a risk-free trader and investor mentality in the market for holiday-cut trading today start week. Gold last fell $ 6.50 to $ 1,798.40 in February and Comex silver last fell $ 0.273 to $ 22.265 an ounce in March.
Global equity markets were mostly lower in overnight trading. US stock indices point to solid lower opens at the start of the New York trading session. It is indeed a risk-free trading day in the market to start a holiday shortened trading week on Monday. The coronavirus pandemic is simply not going to go away and is raging in several European countries, leading to new business and travel restrictions. The Omicron tribe is also booming in parts of the United States as the holiday season approaches.
Also negative for the US markets is the blockade of the Biden government’s $ 1.7 trillion Build Back Better spending program by Senator Joe Manchin. Many analysts say Biden’s grand plan is now in the water – and with it, a severe blow to Biden. Some economists are already withdrawing US economic growth forecasts for 2022.
Pressing Asian stocks overnight is the news that another Chinese real estate firm is in trouble. Kaisa has reportedly said it has defaulted on several US dollar-denominated bonds. The developer is in talks with creditors about a restructuring plan. Larger troubled Chinese real estate developer Evergrande has reclaimed two parcels of land in Chengdu from the local government without compensation, reports said. Asian markets received little help from China’s central bank, which cut the key rate on annual loans to prop up the world’s second largest economy.
Major “foreign markets” today see Nymex crude oil prices solidly lower due to pandemic concerns, trading at around $ 68.20 a barrel. The US dollar index is a little lower this morning. The yield on the 10-year US Treasury note is now 1.387%.
The US economic data due to be released on Monday is light and includes leading economic indicators.
Tech-wise, the February gold futures bulls have the overall short-term technical advantage. The bulls’ next target price is to hit a close above the solid resistance at $ 1,825.00. The bears’ next short-term target is to push futures prices below solid technical support at $ 1,775. Initial resistance will be at the overnight high of $ 1,804.60 and then at. Last week’s high was $ 1,815.70. The initial support is at $ 1,785.00 and then at $ 1,775.00. Wyckoff’s market valuation: 6.0
The March Silver Bears have the overall short-term technical advantage. However, a four-week-old downtrend on the daily bar chart has been negated to indicate that there is a market low. The silver bulls’ next price target is the December futures closing price above solid technical resistance at $ 23.00 an ounce. The next downside target for the bears is to close below the solid support at $ 21.00. Initial resistance is seen at last week’s high at $ 22.69 and then at $ 23.00. The next support is seen at $ 22.00 and then the December low of $ 21.41. Wyckoff’s market valuation: 2.0.
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