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Gold, Silver Rally On New-Year Bargain Buying, Short Covering

Tuesday January 03, 2017 14:03
(Kitco News) - Gold and silver prices ended the first full U.S. day session of the new year with decent gains Tuesday. Bargain hunting in the cash markets and short covering in the futures markets were featured. A sharp rise in the U.S. dollar index overnight did limit buying interest in the gold and silver markets early on, but when the dollar index backed well off its daily high the gold and silver buyers stepped in. February Comex gold was last up $9.10 an ounce at $1,160.70. March Comex silver was last up $0.371 at $16.36 an ounce.

World stock markets were in rally mode Tuesday, but when the U.S. stock indexes started to weaken a bit as the session progressed that also helped out the precious metals market bulls.

A marketplace feature Tuesday was the rally in the U.S. dollar index, which is back near its 13-year high that was scored in late December. The other key “outside market” on Tuesday saw Nymex crude oil prices reverse course and trade lower in afternoon action, after scoring good gains overnight. Last year’s high of $55.44 in February Nymex crude oil futures, which was set in late December, remains stiff overhead chart resistance. Brent crude oil futures prices hit a 17-month high overnight.

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Technically, February gold futures prices closed nearer the session high and scored a bullish “outside day” up on the daily bar chart today. The gold bears still have the firm overall near-term technical advantage. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,180.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the December low of $1,124.30. First resistance is seen at today’s high of $1,166.00 and then at $1,175.00. First support is seen at $1,150.00 and then at today’s low of $1,146.50. Wyckoff's Market Rating: 2.5

March silver futures prices closed nearer the session high on short covering and bargain hunting. The silver market bears still have the firm overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the December low of $15.675. First resistance is seen at today’s high of $16.55 and then at $16.75. Next support is seen at $16.25 and then at $16.00. Wyckoff's Market Rating: 2.5.

March N.Y. copper closed down 160 points at 248.95 cents today. Prices closed near the session low today. The copper bulls have the slight overall near-term technical advantage but have faded recently to suggest a market top is in place. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 265.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 228.00 cents. First resistance is seen at 250.00 cents and then at today’s high of 254.85 cents. First support is seen at last week’s low of 244.80 cents and then at 242.50 cents. Wyckoff's Market Rating: 5.5.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com

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