Strong gains for gold and silver when buying safe havens, and USDX declines

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(Kitco News) – Gold and silver prices rose sharply in early US trading on Tuesday, supported by a strong decline in the US Dollar Index. There is also some safe-haven demand for gold and silver after a surprise policy move by a major central bank rocked the market. Gold for February was last up $31.20 at $1,828.90, and silver in March was up $1,031 at $24.24.

The Bank of Japan on Tuesday took an unexpected step to tighten its monetary policy by raising the interest rate ceiling on its 10-year bonds by 0.25%. The Japanese yen rose against the US dollar in the foreign exchange market. The bond and stock markets were shaken by the news because Japan is a big player in the global bond markets. Japanese citizens are big savers and put a lot of their money into global stocks and bonds. With the domestic bond yield ceiling rising, Japanese citizens and companies may choose to keep more of their money at home. Speculators around the world for years had been placing “carry trades” based on the yen which suddenly became very shaky. With global financial markets so intertwined, it is likely that all of the above have served to boost gold and silver as safe-haven purchases.

Global stock markets were mixed to weaker overnight. US stock indices are slightly higher at midday. The S&P and Nasdaq stock indices hit five-week lows overnight as the bulls continue to fade.



Today, major overseas markets are seeing sharp declines in the US Dollar Index in BoJ news. Crude oil prices on NYMEX are nearing stability and are trading around $75.00 a barrel. Meanwhile, the yield on the 10-year US Treasury note is currently around 3.7% and rising.

Technically, February gold futures prices were poised to close at a four-month low today. The bulls enjoy the company’s overall technical advantage in the near term. There is a six week old bullish trend on the daily bar chart. The next bullish price target for the bulls is to produce a close above the strong resistance at the December high of $1,836.90. Bears’ next bearish price target in the near term is pushing futures prices below the strong technical support level at $1750.00. We notice the first resistance at $1,836.90 and then at $1,850.00. The first support appears at $1,820.00 and then at $1,800.00. Wyckoff Market Rating: 7.0

24-hour silver chart [ Kitco Inc. ]

Silver futures prices for March are expected to close at an eight-month high today. The silver bulls have a strong overall technical advantage in the near term. The prices are in a choppy 3.5 month upward trend on the daily bar chart. The next bullish price target for silver bulls is for prices to close above the strong technical resistance at $25.00. The next downtrend price target for the bears is to close the price below the strong support level of the December low of $22.19. We notice the first resistance at the December high of $24.39 and then $24.75. The next support appears at $23.50 and then $23.00. Wyckoff Market Rating: 7.5.

Copper for March in New York closed up 140 points at 379.70 cents today. Prices closed near the session high of the day. The copper bulls have a slight overall technical advantage in the near term. The next bullish price target for copper bulls is to push prices and close above the strong technical resistance at 400.00 cents. The next downside price target for bears is to close prices below the strong technical support at 354.70 cents. First resistance is seen at 386.75 cents and then at the December high of 392.90 cents. The first support appears at today’s low at 372.30 cents and then at 370.00 cents. Wyckoff Market Rating: 5.5.

Disclaimer: The opinions expressed in this article are those of the author and may not reflect the opinions of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; However, Kitco Metals Inc. cannot. Nor does the author guarantee this accuracy. This article is for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. does not accept The author of this article will not be held liable for losses and/or damages arising from the use of this publication.

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