Gold Erases Modest Losses As U.S. Dollar Weakens

(Kitco News) - Gold prices are near steady in early-afternoon U.S. trading Wednesday, and have recovered mild early losses as the U.S. dollar index has softened and is trading near its daily low at midday. U.S. stock indexes have lost their early gains, which is also benefitting the precious metals market bulls. February gold futures were last up $0.60 an ounce at $1,284.10. March Comex silverwas up $0.045 at $15.37 an ounce.

The Bank of Japan Wednesday left its interest rates unchanged at its regular monetary policy meeting. However, the BOJ did lower its inflation expectations for the next two years, which continues a worldwide theme of lessening worries about problematic inflationary pressures.

Traders are looking ahead to the European Central Bank’s regular monetary policy meeting on Thursday, including ECB President Mario Draghi’s press conference.

News reports out of the annual World Economic Forum in Davos, Switzerland suggest a somewhat gloomy picture that the elite bigwigs attending are painting, and on several fronts. The U.S., Britain and China governments are not in attendance this year.

The U.S. government remains in partial shut-down mode with no agreement between the Democrats and President Trump to reopen it imminent. This is starting to drag on the U.S. economy, including the lack of fresh economic news to help drive many markets. Many of those markets are seeing some selling pressure due to the uncertainty created by the lack of fresh economic news.

The other key outside market today sees Nymex crude oil prices are lower and trading just above $52.00 a barrel. 

Technically, February gold futures bulls have the overall near-term technical advantage, but are fading. A two-month-old price uptrend is still in place on the daily bar chart, but just barely. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,260.00. First resistance is seen at today’s high of $1,286.00 and then at last Friday’s high of $1,292.20. First support is seen at this week’s low of $1,276.00 and then at $1,270.00. Wyckoff's Market Rating: 6.0

March silver futures bulls still have the slight overall near-term technical advantage, but are fading. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the January high of $15.955 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.00. First resistance is seen at today’s high of $15.445 and then at $15.60. Next support is seen at this week’s low of $15.195 and then at $15.05. Wyckoff's Market Rating: 5.5.

March N.Y. copper closed down 70 points at 265.25 cents today. Prices closed nearer the session low. The copper bears have the firm overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 275.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 250.00 cents. First resistance is seen at 270.00 cents and then at last week’s high of 272.70 cents. First support is seen at 2.6165 cents and then at 260.00 cents. Wyckoff's Market Rating: 2.5.