Gold price down a bit, silver solidly up in quieter trading
Gold prices are just slightly lower in early U.S. trading Friday, while silver prices are sporting good gains and are not far below this week’s record high. Trading action is more subdued to end the trading week and with the Christmas holiday less than a week away. February gold was last down $10.10 at $4,354.30. March silver prices were up $0.746 at $65.955.
Global stock markets were mixed overnight. U.S. stock indexes are pointed to slightly firmer openings when the New York day session begins.
BOJ raises key interest rate to highest level in 30 years. The Bank of Japan on Friday raised its benchmark interest rate to the highest level in 30 years and signaled more hikes are likely in the pipeline. However, the Japanese yen weakened due to disappointment that the messaging from the central bank wasn’t stronger, Bloomberg reported. BOJ Governor Kazuo Ueda’s policy board increased the rate by a quarter percentage point to 0.75% in a unanimous decision, according to its statement Friday. The central bank cited the rising likelihood of its economic outlook being realized and pointed to data showing solid wage growth momentum and receding risks from U.S. tariffs. The rate change was expected by all 50 economists surveyed by Bloomberg.
Putin does not sound like he’s seeking peace with Ukraine. Russian President Vladimir Putin said Friday that Moscow’s troops were advancing across the battlefield in Ukraine, voicing confidence that the Kremlin’s military goals would be achieved nearly four years after he ordered troops into the neighboring country. Speaking at his highly orchestrated year-end news conference, Putin declared that Russian forces have “fully seized strategic initiative” and would make more gains by the year’s end, reported the Associated Press. “Our troops are advancing all across the line of contact, faster in some areas or slower in some others, but the enemy is retreating in all sectors,” Putin said at the annual live news conference, which is combined with a nationwide call-in show that offers Russians across the country the opportunity to ask questions of their leader. However, the Russian leader also said that Moscow is ready for a peaceful settlement that would address the “root causes” of the conflict, a reference to the Kremlin’s tough conditions for a deal. Earlier this week, Putin warned that Moscow would seek to extend its gains in Ukraine if Kyiv and its Western allies reject the Kremlin’s demands.
Crude oil prices set for second weekly decline in a row. Nymex crude oil futures fell to around $56.00 per barrel today and are on track for a second straight weekly decline, as oversupply concerns outweighed geopolitical risks. Nymex crude prices earlier this week fell to their lowest level in nearly five years, driven by expectations of ample supply as OPEC+ gradually restores shut-in capacity and non-OPEC producers boost output. Early signs of demand weakness are also emerging among major consumers, including China and the U.S., leaving crude oil prices down about 20% for the year.
The key outside markets today see the U.S. dollar index higher. Crude oil prices are near steady and trading around $56.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.14%.
Note: The gold market operates through two primary pricing mechanisms. The first is the spot market, which quotes prices for on-the-spot purchase and immediate delivery. The second is the futures market, which sets prices for delivery at a future date. Due to year-end positioning market liquidity, the December gold futures contract is currently the most actively traded on the CME.
Technically, February gold futures bulls’ next upside price objective is to produce a close above solid resistance at the contract/record high of $4,433.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $4,200.00. First resistance is seen at this week’s high of $4,409.50 and then at $4,433.00. First support is seen at the overnight low of $4,336.30 and then at this week’s low of $4,297.40. Wyckoff's Market Rating: 8.0.
March silver futures bulls’ next upside price objective is closing prices above solid technical resistance at $70.00. The next downside price objective for the bears is closing prices below solid support at $60.00. First resistance is seen at the overnight high of $66.37 and then at the record high of $67.18. Next support is seen at the overnight low of $64.465 and then at Wednesday’s low of $63.725. Wyckoff's Market Rating: 9.0.
