Gold price rallies to 6-mo. high on safe-haven buying - Kitco NEWS

Welcome to Kitco News' 2023 Outlook Series. Uncertainty continues to dominate financial markets as central bank monetary policies push the global economy into a recession to cool down inflation. Stay tuned to Kitco News to learn from the experts on how to navigate turbulent financial markets in 2023.

(Kitco News) - Gold and silver prices are higher again Wednesday, with gold sharply up and hitting another six-month high. Silver scored an eight-month peak on Tuesday. Safe-haven demand is featured this first trading week of 2023, amid wobbly global stock markets. Bullish technical postures for gold and silver are also prompting chart-based buying. February gold was last up $21.70 at $1,867.80 and March silver was up $0.219 at $24.48.

Global stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins. Still, there is heightened trepidation in the marketplace this first week of the new year. Potentially slowing economic growth in the major industrialized countries along with problematic price inflation in 2023 are keeping traders pensive and prompting safe-haven demand for the precious metals.

One gauge of anxiety in the marketplace was seen Tuesday, when gold prices posted solid gains despite a strong rally in the U.S. dollar index. In past months the USDX and gold prices have traded in a strong inverse relationship on a daily basis. The rally in the gold market this week comes amid the shaky global stocks markets and worries about rising Covid infections in China continuing to crimp the world’s second-largest economy.

The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are solidly lower and trading around $75.00 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently 3.681%.  

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Traders and investors are starting to focus on Friday’s U.S. December employment situation report from the Labor Department. The key non-farm payrolls number is expected to come in at up 200,000, following a rise of 263,000 in the November report.

U.S. economic data due for release Wednesday includes the MBA mortgage applications survey, the Johnson Redbook weekly retail sales report, the ISM report on business manufacturing, domestic auto industry sales and the minutes from the last FOMC meeting.

Technically, the gold futures bulls have the solid overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at $1,900.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,775.00. First resistance is seen at today’s high of $1,871.30 and then at $1,900.00. First support is seen at $1,850.00 and then at the overnight low of $1,842.00. Wyckoff's Market Rating: 8.0

The silver bulls have the solid overall near-term technical advantage. A choppy, four-month-old uptrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing March futures prices above solid technical resistance at $25.00. 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 $24.775 and then at $25.00. Next support is seen at this week’s low of $24.095 and then at $24.00. Wyckoff's Market Rating: 7.5.

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