Modest price gains in gold; silver solidly up and near record high

Global stock markets were mixed overnight. U.S. stock indexes are pointed to slightly firmer openings when the New York day session begins.

In overnight news, India’s central bank cuts its key interest rate. India's central bank today lowered its benchmark interest rate for the first time in six months and signaled it is open to further easing, predicting inflation will remain relatively low. The Reserve Bank of India's six-member monetary policy committee voted unanimously to cut the repurchase rate by 25 basis points to 5.25% and retained the policy stance at neutral. Governor Sanjay Malhotra said the growth-inflation balance continues to provide policy space to support the growth momentum, and the RBI has kept the door open for more policy action. India’s rate cut comes ahead of an expected interest rate reduction from the U.S. Federal Reserve next week and follows weaker economic data from China that suggests Chinese economic officials will also further ease their monetary policy. Easier monetary policies and interest rate cuts from major global economies are potentially bullish for raw commodity markets because they suggest better demand for goods and services due to lower borrowing costs and improved consumer and business confidence.

China expected to keep its monetary policy “loose” at important upcoming meetings. China's leaders are expected to stick with its manufacturing-led growth strategy in key policy meetings this month, reports Bloomberg. “The country's domestic demand is showing significant weakness, but authorities have tried to boost consumption with incremental measures like childcare subsidies. Economists expect policymakers to maintain the current more proactive fiscal stance and a moderately loose monetary stance for 2026, with a focus on advanced manufacturing and technology,” said the report. However, there are also calls growing at home and abroad for a more urgent shift toward consumption. The Communist Party’s decision-making Politburo typically convenes in early December, followed within days by the Central Economic Work Conference. While the meeting statements won’t contain specific policy measures, they serve as a useful guide to understand policymakers’ priorities. “This year’s gatherings come amid signs of significant weakness in domestic demand. Authorities have tried to boost consumption with incremental measures like childcare subsidies but are probably not facing enough pressure yet to make major moves such as expanding the social safety net,” said the report.

The key outside markets today see the U.S. dollar index near steady. Crude oil prices are a bit weaker and trading around $59.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.11%.

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 $4,100.00. First resistance is seen at $4,273.30 and then at $4,300.00. First support is seen at the overnight low of $4,224.60 and then at $4,200.00. Wyckoff's Market Rating: 7.5.

March silver futures bulls have the strong overall near-term technical advantage. Their next upside price objective is closing prices above solid technical resistance at $60.00. The next downside price objective for the bears is closing prices below solid support at $55.00. First resistance is seen at the contract high of $59.655 and then at $60.00. Next support is seen at $57.00 and then at this week’s low of $56.85. Wyckoff's Market Rating: 9.0.