Gold, silver down as bulls run out of gas

Gold and silver prices are lower in midday U.S. trading Tuesday, on follow-through technical selling following big losses suffered Monday. On Monday gold spiked to a new record high of $2,152.30, basis February Comex futures. Silver hit a seven-month high Monday. Monday’s price action in gold and silver suggests the bulls quickly became exhausted and that near-term market peaks are in place. February gold was last down $9.30 at $2,032.90. March silver was last down $0.492 at $24.41.

Bearish for the gold and silver markets early this week is a rebound in the U.S. dollar index.

Asian and European stock markets were mixed to weaker in overnight trading. U.S. stock indexes are slightly lower near midday.

Moody’s credit rating agency today cut its outlook on China’s credit rating from stable to negative amid the weakening economic growth outlook and property sector problems in the country. Moody’s currently rates China’s sovereign debt at A1. The agency expects China’s economic growth to slow to 4% annual GDP in 2024 and 2025. A Dow Jones Newswires headline today reads: “China’s colossal hidden-debt problem is coming to a head.” The Moody’s news is a mixed bag for safe-haven gold and silver. It’s bullish in the sense that the world’s second-largest economy is in some trouble. However, it’s bearish because a weakening Chinese economy means less demand coming from a major gold-consuming country.

The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are slightly up and trading around $73.50 a barrel. The yield on the benchmark U.S. Treasury 10-year note is presently fetching around 4.2%.

Technically, February gold futures prices Monday scored a record high of $2,152.30 and then promptly reversed course to sell off sharply and score a technically bearish “key reversal” down on the daily bar chart. That’s one chart clue the bulls are out of gas and that a near-term market top is in place. The bulls still have the overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the record high of $2,152.30. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. First resistance is seen at $2,050.00 and then at $2,072.70. First support is seen at today’s low of $2,027.60 and then at $2,015.00. Wyckoff’s Market Rating: 6.5

March silver futures prices Monday scored a big and bearish “outside day” down on the daily bar chart. The bulls appear to have run out of gas to suggest a near-term market top is in place. The silver bulls do still have the overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at this week’s high of $26.34. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at $25.00 and then at $25.25. Next support is seen at $24.25 and then at $24.00. Wyckoff’s Market Rating: 6.0.

March N.Y. copper closed down 485 points at 378.70 cents today. Prices closed nearer the session low today. The copper bulls still have the slight overall near-term technical advantage but appear exhausted now. Prices are in a six-week-old uptrend on the daily bar chart, but now just barely. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at the December high of 393.30 cents. The next downside price objective for the bears is closing prices below solid technical support at the November low of 362.60 cents. First resistance is seen at today’s high of 384.10 cents and then at 390.00 cents. First support is seen at today’s low of 378.05 cents and then at 375.00 cents. Wyckoff’s Market Rating: 5.5.