Meager Price rebounds for gold, silver, after Wednesday's losses

New York (Jan 7)  Gold and silver futures prices are higher in early U.S. trading Thursday, on a rebound from the strong selling pressure seen on Wednesday. Gains in the two precious metals are tepid, however, as the U.S. and global stock markets continue to power higher. February gold futures were last up $8.90 at $1,917.30 and March Comex silver was last up $0.163 at $27.205 an ounce.

Global stock markets were mostly up overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. The stock and financial markets appeared to ignore the protesters that stormed and then occupied for several hours the U.S. Capitol Wednesday afternoon. Congress was disrupted but a few hours later voted to confirm Joe Bident as the next U.S. president. There was also, at least initially, not much markets reaction to the two Georgia U.S. Senate seats that went to the Democrats and gave them the majority in the Senate and in Congress.

Said one market analyst in an email dispatch Thursday morning, “The reflation trade is back on,” referring to the likely big government spending by the Democrats in the next couple years. Indeed, an examination of the actions of the raw commodity futures markets sees many of them rallying to multi-month or multi-year highs, led by Nymex crude oil futures surging to a 10-month high of $51.28 a barrel overnight. The U.S. dollar index has rebounded Thursday from a 2.5-year low hit on Wednesday. Still, the USDX is in deep technical trouble as a price downtrend remains firmly in place. The other market suggesting inflation is on the rise is the U.S. Treasury market, whose 10-year note yield this week has pushed above 1.0%. Thursday the 10-year was yielding 1.044%.

It’s hard for the general marketplace to ignore the price action in Bitcoin recently, as the crypto currency hit a record high above $39,000 on Thursday. Some are calling Bitcoin “the new gold.”

The Employment Situation Report issued by the Labor Department comes out on Friday morning. That report is expected to show a U.S. unemployment rate of 6.8% and a non-farm jobs rise of 50,000 in December, versus a rise of 245,000 in November. However, the big miss on the downside in the ADP national employment report on Wednesday has many thinking the same will occur in Friday’s jobs report—a big contraction in non-farm jobs.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, international trade in goods and services, and the ISM report on business.

Technically, the February gold futures bulls have the overall near-term technical advantage amid a price uptrend in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at the November high of $1,973.30. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at the overnight high of $1,929.60 and then at $1,950.00. First support is seen at this week’s low of $1,902.60 and then at $1,900.00.

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