Normal price corrections in gold, silver, but bulls remain strong

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 trading weaker in early U.S. action Friday, on routine downside corrections after recent good gains that pushed prices to two-month highs this week. The bulls remain in firm near-term technical control. February gold futures were last down $4.70 at $1,837.90 and March Comex silver was last down $0.226 at $24.485 an ounce.

Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. Risk appetite has receded this week and that’s been bullish for the safe-haven metals. Inflation fears that are growing have put pressure on paper assets recently—namely stocks and bonds. Technical damage has been inflicted in the S&P 500 and the Nasdaq stock indexes that suggests those markets have put in at least near-term tops. Geopolitics are also in play early this year as the U.S. and Russia are in a stare-down over Russia’s aggression ambitions against Ukraine.

Crypto currencies are also feeling the heat this week, with Bitcoin hitting its lowest level since August.

The key outside markets today see crude oil prices down and trading around $84.00 a barrel. The U.S. dollar index is a bit weaker early today. The U.S. Treasury 10-year note yield is presently fetching 1.792%.

U.S. economic data due for release Friday is light and includes leading economic indicators.

Technically, the February gold futures bulls have the firm overall near-term technical advantage amid a five-week-old 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 the November high of $1,881.90. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at the overnight high of $1,843.10 and then at this week’s high of $1,848.50. First support is seen at the overnight low of $1,828.40 and then at $1,820.00. Wyckoff’s Market Rating: 7.0

March silver futures bulls have the firm overall near-term technical advantage. Prices are in a five-week-old uptrend on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the November high of $25.54 an ounce. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at this week’s high of $24.755 and then at $25.00. Next support is seen at Thursday’s low of $24.125 and then at $24.00. Wyckoff’s Market Rating: 6.5.