Gold settled higher Wednesday reversing the loss from the previous session and continuing the upward trend over the past week. It has now recorded positive returns for 5 of the last 7 trading days. We are still waiting to see if this is a short term bounce off of the lows seen on December 12th, or if this is a persistent longer term trend. Little movement was seen after the interest rates were lifted a quarter point as expected by the Fed last week. Higher interest rates typically signal downward pressure on the metal favoring higher yielding assets, but we saw little effect as the slow pace of interest rate increases have been priced in with little attributable volatility. It seems the recent gains are more likely credited to the weakening dollar and slightly higher than expected inflation projections. While the new tax bill has not yet been signed by President Trump, it is anticipated shortly, and so has shown little effect on the metal market. The third quarter final GDP release and unemployment claims come out tomorrow, any break from expectations could result in price volatility. As is typical, Silver saw almost the same scenario as gold rebounding since a week ago. Copper continues its upward trend after having only 1 negative day in the last 12 market sessions. The forecasted manufacturing demand from China remains high pushing the metal prices higher. After an incredibly tough beginning to the month for all metals, the volatility subsided and allowed them to finally trend upwards.
For February gold, near term resistance sits at 1267.8 while longer term resistance comes in at 1271.3. Support is down at 1261.5, with longer term support at 1258.7. For Silver, support is seen at 16.08. with the next support level down at 16.00. Resistance is up at 16.25 and above there at 16.33.
Bullion on Bullion
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