Gold, silver see price gains in inflation worries

Welcome to Kitco News’ 2022 outlook series. The new year will be filled with uncertainty as the Federal Reserve looks to pivot and tighten its monetary policies. At the same time, the inflation threat continues to grow, which means real rates will remain in low to negative territory. Stay tuned to Kitco News to learn from the experts on how to navigate turbulent financial markets in 2022.

(Kitco News) – Gold and silver futures prices are higher in early U.S. trading Wednesday, with silver notching a seven-week high. The precious metals are seeing buying interest amid growing worries about rising global price inflation, as well as some geopolitics presently at play. February gold futures were last up $7.20 at $1,819.70 and March Comex silver was last up $0.363 at $23.855 an ounce.

Global stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins, following solid losses Tuesday. Risk aversion is heightened at mid-week. The Biden Administration said it thinks Russia may be on the brink of invading Ukraine. North Korea is test-firing missiles again, and terrorists attacked the United Arab Emirates with drones a few days ago. And bond yields are rising on rising inflation concerns.

In overnight news, U.K. inflation rose to a 30-year high as the consumer price index rose 5.4% in December, year-on-year.

The key outside markets today see crude oil prices higher, at a seven-year high and trading around $86.50 a barrel. The International Energy Agency forecast that global oil demand in 2022 will exceed that of the pre-pandemic levels.

The U.S. dollar index is weaker early today. The U.S. Treasury 10-year note yield is presently fetching 1.89%. The U.S. two-year note yield has pushed above 1.0%. The 10-year German bond (bund) yield moved into positive territory for the first time in nearly three years, fetching 0.008%.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly chain store sales index, new residential construction, and the Johnson Redbook retail sales report.

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’ next upside price objective is to produce a close in February futures above solid resistance at $1,850.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the January low of $1,781.30. First resistance is seen at this week’s high of $1,822.90 and then at the January high of $1,833.00. First support is seen at the overnight low of $1,809.00 and then at $1,800.00. Wyckoff’s Market Rating: 6.5

March silver futures bulls have gained the overall near-term technical advantage. Prices are in an uptrend on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $25.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the January low of $21.945. First resistance is seen at $24.00 and then at $24.25. Next support is seen at the overnight low of $23.43 and then at $23.00. Wyckoff’s Market Rating: 6.0. By Jim Wyckoff

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