Gold, silver rally as traders buy the early dip

JGold and silver futures prices are modestly up in midday U.S. trading Tuesday. Overnight losses were deemed by the precious metals bulls to be a bargain buying opportunity. Otherwise, some routine backing and filling on the charts has been featured as fresh fundamental inputs are awaited. April gold futures were last up $6.70 at $1,828.50 and March Comex silver was last up $0.154 at $23.23 an ounce.

Global stock markets were mixed overnight. U.S. stock indexes are higher at midday. Corporate earnings reports are in the spotlight at present. While earnings reports have been mostly upbeat, some have not, including a few big companies. That and inflation worries are making the U.S. stock indexes wobbly. More and more, it’s looking like the Federal Reserve will be aggressive and raise the Fed funds rate by 0.5% at its March meeting. Historically, rising interest rates and rising inflation have been bearish for stock markets and bullish for the metals markets.

The U.S. data point of the week will be Thursday morning’s consumer price index report for January, expected to come in at up 7.2%, year-on-year. That would be a hot reading if the CPI number meets market expectations.

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The key outside markets today see crude oil prices lower and trading around $89.50 a barrel after prices last Friday hit a seven-year high. The U.S. dollar index is firmer early today. The U.S. Treasury 10-year note yield is presently fetching 1.954%, which is near a three-year high.

Technically, the April gold futures bulls have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at the January high of $1,856.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the December low of $1,755.40. First resistance is seen at this week’s high of $1,824.60 and then at $1,835.00. First support is seen at this week’s low of $1,807.50 and then at $1,800.00. Wyckoff's Market Rating: 6.0

March silver futures bears have the overall near-term technical advantage. Silver bulls' next upside price objective is closing 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 December low of $21.41. First resistance is seen at this week’s high of $23.11 and then at $23.48. Next support is seen at this week’s low of $22.50 and then at $22.25. Wyckoff's Market Rating: 3.0.

Technically, April gold futures prices hit a two-week high today. Bulls have the overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at the January high of $1,856.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the January low of $1,780.60. First resistance is seen at $1,835.40 and then at $1,850.00. First support is seen at today’s low of $1,816.00 and then at this week’s low of $1,807.50. Wyckoff's Market Rating: 6.5

March silver futures bears have the overall near-term technical advantage. Silver bulls' next upside price objective is closing 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 December low of $21.41. First resistance is seen at $23.48 and then at $23.75. Next support is seen at $23.00 and then at today’s low of $22.77. Wyckoff's Market Rating: 4.0.

March N.Y. copper closed down 140 points at 444.85 cents today. Prices closed near mid-range today. The copper bulls have the slight overall near-term technical advantage amid recent choppy trading. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the January high of 460.10 cents. The next downside price objective for the bears is closing prices below solid technical support at the January low of 428.20 cents. First resistance is seen at today’s high of 448.40 cents and then at this week’s high of 451.95 cents. First support is seen at today’s low of 439.50 cents and then at 437.00 cents. Wyckoff's Market Rating: 5.5.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips