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(Kitco News) – Gold and silver prices are higher in early US trading Tuesday, supported by a drop in the US dollar index and gains in crude oil prices. However, buying interest is being tempered as the US trading session gets under way, as global bond yields are on the rise. February gold was last up $11.70 at $1,809.60 and March silver was up $0.586 at $23.785.
The Bank of Japan on Tuesday made a surprise move to tighten its monetary policy by raising the cap for the interest rate on its 10-year bond by 0.25%. The Japanese yen surged against the US dollar in the foreign exchange market. Bond and stock markets were rattled on the news because Japan is a big player in global bond markets. Japanese citizens are big savers and put much of their money into global stocks and bonds. With the higher domestic bond yield cap, Japanese citizens and companies may opt to keep more of their money at home.
Global stock markets were mixed to weaker overnight. US stock indexes are pointed toward narrowly mixed openings when the New York day session begins. The S&P and Nasdaq stock indexes hit new five-week lows overnight as the bulls continue to fade. Trading volumes are likely to wane as the week progresses, ahead of the Christmas holiday over the weekend.
The key outside markets today see the US dollar index lower. Nymex crude oil prices are up and trading around $76.00 a barrel. Meanwhile, the yield on the benchmark US 10-year Treasury note is presently 3.655% and is on the rise.
US economic data due for release Tuesday includes the weekly Johnson Redbook and chain store sales indexes, and new residential sales.
Technically, the gold futures bulls have the overall near-term technical advantage but have faded. Prices are still in a six-week-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at the December high of $1,836.90. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,750.00. First resistance is seen at today’s high of $1,819.20 and then at the December high of $1,836.90. First support is seen at $1,800.00 and then at this week’s low of $1,793.20. Wyckoff’s Market Rating: 6.0
The silver bulls have the firm overall near-term technical advantage. A choppy, three-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 $22.00. First resistance is seen at today’s high of $24.105 and then at the December high of $24.39. Next support is seen at $23.00 and then at last week’s low of $22.735. Wyckoff’s Market Rating: 7.0.
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