(Kitco News) - Gold futures prices are posting mild gains in midday U.S. dealings Tuesday, as a weaker U.S. dollar index, higher crude oil prices, and a pause in the U.S. stock market rally are giving the yellow metal’s bulls some strength. Gold prices are off their daily highs and silver prices are trading modestly down. April gold futures were last up $3.70 at $1,837.90 and March Comex silver was last down $0.166 at $27.41 an ounce.
The U.S. dollar index is lower today on a corrective pullback from recent gains that pushed the index to a two-month high last week. Meantime, Nymex crude oil futures prices hit a 13-month high today are trading around $58.35 a barrel.
The “reflation trade” remains a feature in the global marketplace this week. Raw commodity markets are rallying, led by crude oil, while U.S. bond yields are rising. The yield on the benchmark 10-year U.S. Treasury note stands at 1.165%. Following is an edited comment from an Asian broker in an email dispatch this morning: “Inflation looks increasingly likely in the West as the yuan appreciates and companies look to restock supply chains as logistics and shortages present greater risk. Rising raw materials costs will be increasingly passed onto consumers. The Chinese yuan has strengthened to Rmb 6.44/U.S. dollar from 7.15 in May 2020, causing the cost of Chinese goods to the West to rise. Raw materials prices are rising, transport costs are higher. Disruption is an increasing cost as shipping containers are blocked or simply not readily available. Western manufacturers, which have enjoyed the benefit of low Asian component costs and fast, reliable and low-cost logistics--all this is changing. Unit costs will rise as manufacturers struggle to raise utilization rates as logistics become less reliable.” To many longtime market watchers it seems unfathomable that all the monetary policy stimulus from central banks and government assistance programs implemented the past year cannot avoid creating problematic price inflation in the not-too-distant future.
Global stock markets were mixed overnight. U.S. stock indexes are steady to slightly up at midday, after setting record highs early on in the session. U.S. stock market bulls are taking a pause Tuesday, but risk sentiment remains upbeat as new U.S. Covid-19 cases are starting to decline as vaccinations continue to roll out. Also, hopes are high that the Biden administration will implement a big financial stimulus package by springtime.
In another feature this week, Bitcoin-U.S. dollar prices are higher and hit a new all-time high above $48,000 Tuesday. The BC bulls got an electric jolt to the upside when it was just announced Monday morning that Tesla will invest $1.5 billion in Bitcoin and that the electric vehicle maker will incorporate Bitcoin into its car-purchasing operation. More and more it appears that Bitcoin is gaining credibility among the veteran market watchers that may have been early naysayers to the cryptocurrency asset class. It appears that safe-haven gold and silver may be gaining some buying interest from the Bitcoin surge this week, possibly due to notions the growing move by investors into Bitcoin as an asset class will take away some of the allure of the U.S. dollar being what many consider the ultimate safe-haven asset. Bitcoin bulls are in solid technical control to suggest still more upside in the near term.
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2924175530478188){kind=small}
Technically, April gold futures bears have the slight overall near-term technical advantage. Prices are in a four-week-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,878.90. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,771.30. First resistance is seen at today’s high of $1,849.50 and then at $1,865.00. First support is seen at today’s low of $1,830.30 and then at $1,821.30. Wyckoff's Market Rating: 4.5
![Live 24 hours silver chart [ Kitco Inc. ]](https://www.kitco.com/images/live/silver.gif)
March silver futures bulls still have the overall near-term technical advantage and are working to restart a price uptrend on the daily chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the February high of $30.25 an ounce. The next downside price objective for the bears is closing prices below solid support at $25.00. First resistance is seen at today’s high of $27.875 and then at $28.00. Next support is seen at today’s low of $27.13 and then at this week’s low of $26.93. Wyckoff's Market Rating: 6.0.
March N.Y. copper closed up 575 points at 372.35 cents today. Prices closed near the session high today and closed at a contract high close. The copper bulls have the solid overall near-term technical advantage and gained more power today. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 380.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 355.00 cents. First resistance is seen at the contract high of 373.40 cents and then at 375.00 cents. First support is seen at today’s low of 366.70 cents and then at this week’s low of 362.25 cents. Wyckoff's Market Rating: 8.0.
