December J, 2022

Gold, silver rally amid bullish outside markets, dovish Powell

Gold and silver prices are sharply higher in midday U.S. trading Thursday, with gold notching a 3.5-month high and silver a six-month high. A slumping U.S. dollar index, higher crude oil prices and falling U.S. Treasury yields on this day are all boosting the precious metals markets.

March silver futures prices hit a six-month high today. The silver bulls have the firm overall near-term technical advantage. Prices are in a choppy three-month-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $24.00. The next downside price objective for the bears is closing prices below solid support at $20.79. First resistance is seen at today's high of $22.945 and then at $23.00. Next support is seen at today's low of $22.24 and then at $22.00. Wyckoff's Market Rating: 7.0.

March N.Y. copper closed up 640 points at 380.25 cents today. Prices closed near the session high today. The copper bulls have thet overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the November high of 394.70 cents. The next downside price objective for the bears is closing prices below solid technical support at 350.00 cents. First resistance is seen at 385.00 cents and then at 390.00 cents. First support is seen at today's low of 373.50 cents and then at 365.00 cents. Wyckoff's Market Rating: 6.0.

lean by the U.S. central bank is also fueling the metals markets bulls today. February gold was last up $56.60 at $1,816.50 and March silver was up $1.034 at $22.82.

The marketplace deemed Federal Reserve Chairman Jerome Powell's highly anticipated speech at the Brookings Institution Wednesday afternoon as leaning dovish on U.S. monetary policy. That rallied the U.S. stock market, pressured the U.S. dollar index and dropped U.S. Treasury yields. Gold and silver prices rallied in the aftermath of Powell's remarks. He said the U.S. central bank could slow the pace of monetary policy tightening as soon as the FOMC meeting in two weeks. However, Powell said the Fed will need to hold policy at restrictive levels “for some time.” Powell added that inflation remains far too high and that future rate hikes are warranted.

Global stock markets were mostly firmer overnight. U.S. stock indexes are weaker at midday following strong gains posted Wednesday.

Traders continue to monitor the civil unrest in China. It seems the situation is not spiraling out of control, but neither is it fading away. Reports say China is relaxing some its Covid lockdowns (likely due to the public protests), while at the same time China says new Covid infections are declining and vaccinations are on the rise. Relaxed Covid restrictions in the world's second-largest economy suggest better economic strength for China, which in turn would mean better demand for metals.

GLD positioning itself for future growth with second custodian for its gold

The key outside markets today see the U.S. dollar index sharply lower and hitting a 3.5-month low. Nymex crude oil prices are higher and trading around $82.25 a barrel. There have been some reports OPEC at its meeting early next week will consider cutting its collective crude oil production. Other reports say the cartel will leave its production unchanged. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently 3.556%.

Focus is now on Friday morning's U.S. employment situation report for November. The key non-farm payrolls figure is expected to come in at up 200,000, compared to the rise of 261,000 seen in the October report.

Technically,February gold futures prices hit a 3.5-month high today. The gold futures bulls have the firm overall near-term technical advantage and gained more power today. Prices are in a four-week-old uptrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at $1,850.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at this week's low of $1,752.90. First resistance is seen at today's high of $1,818.40 and then at the August high of $1,836.70. First support is seen at $1,800.00 and then at today's low of $1,782.90. Wyckoff's Market Rating: 7.0