Gold price near steady as risk appetite growing

Gold prices are trading not far from unchanged in early U.S. dealings Wednesday. Buying interest is being limited in safe-haven gold and silver as trader and investor risk appetite seems to be growing keener by the day. However, selling interest in the metals is being squelched by the big rebound in crude oil prices recently, which suggests "black gold" and the leader of the raw commodity sector has put in at least a near-term bottom. February gold was last up $0.50 at $1,785.50 and March Comex silver was last down $0.093 at $22.425 an ounce.

Global stock markets were mostly up in overnight trading. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. The Omicron fears seen over the past nearly two weeks have quickly faded as trader and investor risk appetite is robust at mid-week. Pfizer has just reported three vaccine doses neutralize the Omicron variant, while two doses likely still prevent serious effects from the variant.

As Omicron moves off the front burner of the marketplace, focus is on other matters such as new ideas the Federal Reserve will move even more quickly to end its bond-buying program, so it can start raising U.S. interest rates. The Fed's FOMC meets next week. The marketplace now expects the Fed to hike rates in May of next year. The Fed recently abandoned its notion that inflation is just "transitory."

In other news, China's stock markets have been pressured this week as property giant Evergrande missed a bond payment deadline Monday.

Traders are also monitoring the Russia-Ukraine border situation, where Russia has amassed troops. U.S. President Biden and Russian President Putin discussed the matter on the telephone Tuesday, but no progress was made on a de-escalation of the apparent Russian intentions of invading Ukraine and even annexing it. It appears this situation will get more tense before it gets better, and that means safe-haven assets are likely to come more into favor in the near term, including gold, silver, the U.S. dollar and U.S. Treasuries.

The key "outside markets" today see Nymex crude oil prices lower and trading around $71.00 a barrel. This week's strong gains in crude oil suggest the market last week put in a near-term bottom. The U.S. dollar index is slightly lower. Meantime, the yield on the U.S. Treasury 10-year note is presently fetching 1.461%.

U.S. economic data due for release Wednesday is light and includes the weekly MBA mortgage applications survey and the weekly DOE liquid energy stocks report.

Technically, February gold futures bulls have the slight overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at $1,840.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,761.00. First resistance is seen at the overnight high of $1,794.30 and then at $1,800.00. First support is seen at this week's low of $1,772.40 and then at last week's low of $1,762.20. Wyckoff's Market Rating: 5.5

The March silver bears have the firm overall near-term technical advantage. Prices have been trending down for nearly three weeks. Silver bulls' next upside price objective is closing December futures prices above solid technical resistance at $24.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the September low of $21.46. First resistance is seen at this week's high of $22.635 and then at $23.00. Next support is seen at last week's low of $22.035 and then at $22.00. Wyckoff's Market Rating: 2.5.
 

By Jim Wyckoff

For Kitco News

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