In midday U.S. trading on Tuesday, gold prices experienced a slight increase while silver showed marginal weakness. Technical-based buying is cited as a contributing factor to gold’s gains, with charts still favoring bullish sentiment. Elevated crude oil prices also supported the metals market, but these gains were tempered by a firmer U.S. dollar index and a slight uptick in U.S. Treasury yields.
As of the latest data, February gold recorded a $3.50 uptick, reaching $2,036.90, while March silver displayed a minor decrease of $0.12, settling at $23.19.
Despite the mixed performance in precious metals, U.S. stock index futures displayed a diverse trend in midday trading.
Reports from overnight sources indicated that China’s central bank is contemplating a potential reduction in its reserve requirement ratio to stimulate lending and bolster economic growth. While this action is not imminent, it suggests a possibility in the coming months. This news might contribute to improved consumer and commercial demand for metals from China.
Looking ahead, the focus will be on key U.S. data points for the week, particularly the December consumer price index report on Thursday and the December producer price index report on Friday. With recent cooling in U.S. inflation, the Federal Reserve has been able to adopt a less stringent monetary policy. The upcoming CPI report is anticipated to show a 3.3% year-on-year increase, compared to the 3.1% rise in the November report.
In the broader market context, the U.S. dollar index saw moderate gains, while Nymex crude oil prices displayed strength, hovering around $72.75 per barrel. Concurrently, the yield on the benchmark U.S. Treasury 10-year note was at 4.011%.
From a technical standpoint, February gold futures maintain a near-term advantage for bulls. The current uptrend, established over three months on the daily bar chart, positions gold with a bullish bias. Resistance levels for bulls include $2,053.30 and $2,071.10, with the ultimate objective being a close above $2,100.00. Conversely, bears aim to push prices below solid technical support at $2,000.00.
For March silver futures, bears currently hold the overall near-term technical advantage. A five-week downtrend is evident on the daily bar chart, with resistance at $23.565 and $23.715. Bulls seek to surpass solid technical resistance at $25.00, while the downside objective for bears is closing prices below the November low of $22.26.
March N.Y. copper faced a decline, closing at 377.80 cents, marking a three-week low. The copper bulls have relinquished their slight near-term technical advantage, with a disrupted uptrend on the daily bar chart. Resistance levels for bulls include 384.05 cents and 386.60 cents, while bears aim to close prices below the December support of 365.00 cents. The session low today was at 377.40 cents, with additional support at 372.90 cents.
In summary, the metals market is witnessing nuanced movements influenced by technical factors, global economic indicators, and geopolitical considerations.