Price gains for gold, silver as bulls keep their foot on the gas

Global stock markets were mostly weaker overnight. U.S. stock indexes are pointed to lower openings when the New York day session begins.

Global stock markets rally, post-Fed rate cut. Global stock indexes have hit record highs or have them in their sights after a week in which affirmation that the Federal Reserve’s interest-rate easing cycle remains intact helped clear the way for a year-end “Santa Claus” rally. Europe’s Stoxx 600 rose as much as 0.5% to a fresh peak. A measure for Asia advanced to less than 2% from its all-time high. S&P 500 futures were slightly lower after the benchmark posted a new closing milestone late this week. “Everyone is convincing themselves that there will be a Christmas rally, so it looks like there will be one, and to be honest, there’s no negative catalyst visible until the end of the year,” said Karen Georges, a fund manager at Ecofi Investments in Paris and as reported by Bloomberg. “Investors are keen to buy this year’s laggards; it’s a good time to diversify your portfolio at the moment.”

U.S. dollar index set for third straight weekly decline. The U.S. dollar index hit a six-week low Thursday and is set to post a decline for the third consecutive week. The depreciating greenback comes as the Federal Reserve cut interest rates as expected and delivered a less hawkish outlook than markets anticipated. Fed Chair Jerome Powell indicated that further rate hikes are unlikely, with Fed projections pointing to a single reduction next year. In contrast, other major economies, including Australia, Canada, and Europe, are seeing hawkish repricing, further weighing on the greenback. The U.S. dollar is poised to weaken against most major currencies this week, with the steepest losses expected versus the Euro currency.

Russia-Ukraine peace talks drag on; Trump says U.S. would help keep Ukraine secure. President Trump said the U.S. would be willing to contribute assistance to Ukraine as part of a security agreement to end the war with Russia. Trump expressed frustration with the pace of talks and disappointment that Ukraine President Volodymyr Zelenskiy had not more readily signed off on a peace plan crafted by the U.S. Trump's spokeswoman described him as "extremely frustrated with both sides of this war" and said he wants action, not just talk, to get the conflict "settled,” Bloomberg reported. “He doesn’t want any more talk. He wants action,” White House Press Secretary Karoline Leavitt told reporters on Thursday.

The key outside markets today see the U.S. dollar index up a bit after hitting a six-week low Thursday. Crude oil prices are slightly lower trading around $57.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.17%.

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 $4,400.00 and then at $4,433.00. First support is seen at $4,300.00 and then at the overnight low of $4,295.50. 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 $57.00. First resistance is seen at $65.00 and then at $66.00. Next support is seen at the overnight low of $63.125 and then at $62.00. Wyckoff's Market Rating: 9.5.