Gold, silver see modest gains as bulls regaining momentum

Gold and silver futures prices are higher and nearer daily highs in midday U.S. trading Wednesday, on continued short covering and perceived bargain buying. A slumping U.S. dollar index and crude oil prices hitting seven-year highs earlier this week remain bullish outside market forces for the metals markets. April gold futures were last up $7.40 at $1,808.80 and March Comex silver was last up $0.08 at $22.675 an ounce.

The U.S. data point of the day Wednesday was the ADP national employment report for January, which came in at down 301,000 jobs. The report was forecast to show a gain of 200,000 jobs. Markets saw no major reaction to today’s report. The ADP report is the precursor to the more important Labor Department employment situation report that is due out Friday morning. That report is also expected to be downbeat, with its key non-farm payrolls number expected to come in up only 150,000 jobs in January.

Global stock markets were mostly higher overnight. U.S. stock indexes are mixed at midday. The U.S. stock index bulls are having a very good week and are gaining strength and momentum again. Generally good U.S. corporate earnings reports are boosting trader and investor confidence this week. China’s markets are closed all week for the Lunar New Year holiday.

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The key outside markets today see crude oil prices a lower and trading around $87.50 a barrel. The OPEC oil cartel, as expected, raised its collective oil production level by 400,000 barrels per day. The U.S. dollar index is lower today. The U.S. Treasury 10-year note yield is presently fetching 1.797%.

Technically, April gold futures bulls have the slight overall near-term technical advantage. However, a bear flag pattern has formed on the daily bar chart. 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 December low of $1,755.40. First resistance is seen at $1,825.00 and then at $1,835.40. First support is seen at $1,800.00 and then at today’s low of $1,794.60. Wyckoff's Market Rating: 5.5

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 this week’s high of $23.06 and the at $23.48. Next support is seen at this week’s low of $22.25 and then at $22.00. Wyckoff's Market Rating: 3.0.

March N.Y. copper closed up 425 points at 447.80 cents today. Prices closed nearer the session high today. The copper bulls have gained the slight overall near-term technical advantage. 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 December low of 419.95 cents. First resistance is seen at today’s high of 450.90 cents and then at 455.00 cents. First support is seen at today’s low of 443.00 cents and then at 440.00 cents. Wyckoff's Market Rating: 5.5.
 

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips