teady-weak price action in gold, silver as 2022 winds down

(Kitco News) - Gold and silver prices are not straying too far from unchanged levels in quieter early U.S. trading Friday. Many traders are on holiday this week, making for lighter trading volumes and thin conditions. Traders will hit the exit doors early today, ahead of the three-day New Year holiday weekend. February gold was last down $2.40 at $1,823.60 and March silver was down $0.21 at $24.035.

Global stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. The marketplace is quieter this week following the Christmas holiday and just ahead of the new year.

The marketplace in the new year will continue to closely monitor China’s battle with Covid. Broker SP Angel this morning reports in an email dispatch:

“Chinese Covid rates are going to have a substantial impact on the ability of factories to produce, transporters to deliver, builders to build, and on finance companies to finance. This could stall the Chinese economy for a few months, though we suspect China’s authorities will do their best to keep the wheels on. The authorities are already telling Covid-positive people to go to work, a policy which is likely to spread the infection faster than in any other nation. The narrative seems to be that Omicron is milder than Delta and presents a lesser risk to nation. China is also asking families to sign Cremation forms saying: “I guarantee that the deceased XXX did not die of #COVID, and I will be fully responsible for any false claim.” (The Telegraph). Chinese covid deaths have risen to 9,000 a day, around double last week’s mortality rate, according to U.K. research firm Airfinity, the world's first dedicated COVID-19 health analytics and intelligence platform. (Reuters). Airfinity also reckons cumulative deaths reached 100,000 over the past 30 days with some 18.6 million infections using modelling based on data from Chinese provinces before recent changes on reporting cases. The research group expects China's Covid infections to reach their first peak on Jan. 13 with 3.7 million cases a day and for Covid deaths to peak on Jan. 23 around 25,000 a day with cumulative deaths reaching 1.7 million by end-April. China has officially reported just 10 COVID deaths since 7th December.”

With the lack of fresh, major business news this week, let’s look at some news headlines Friday morning from the Dow Jones Newswire.

“This was a terrible year for stocks; next year could surprise—positively”
“China’s Covid easing and policy pivots brighten outlook for stocks”
“Small businesses find some relief from hiring woes”
“Copper set for first annual decline in four years”
“What a crazy year: a bear market (stocks), oil’s pop, and those bond yields”
“Higher rates threaten U.S. renovation boom”
“(U.S.) mortgage rates log biggest yearly rise”
“Dollar rally loses some steam”
“Crypto went 12 rounds with Mike Tyson in 2022; now, Bitcoin whales are buying”

The key outside markets today see the U.S. dollar index weaker. Nymex crude oil prices are slightly lower and trading around $78.75 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently 3.854%.  

U.S. economic data due for release Friday is light and includes the Chicago ISM business survey.

Technically, the gold futures bulls have the firm overall near-term technical advantage. Prices are in a seven-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 $1,900.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,775.00. First resistance is seen at $1,836.90 and then at this week’s high of $1,841.90. First support is seen at the overnight low of $1,819.80 and then at Thursday’s low of $1,811.20. Wyckoff's Market Rating: 7.0.

By Jim Wyckoff

For Kitco News

 jwyckoff@kitco.com

www.kitco.com