Gold Futures Update February 2024

Gold Futures Update

Gold and silver prices are firmer in early U.S. trading Tuesday, on some short covering in the futures markets and some perceived bargain hunting in the cash markets. A weaker U.S. dollar index today is also working in favor of the precious metals markets bulls. April gold was last up $9.00 at $2,047.90. March silver was last up $0.174 at $22.70. Asian and European stock markets were mostly higher in overnight trading. U.S. stock index futures are set to open slightly up when the New York day session begins. It’s been a quieter trading week so far, but the economic data pace picks up today in the U.S. In other news, President Biden said there is some hope for an Israel Hamas ceasefire during the Ramadan holiday period. The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are slightly down and trading around $77.25 a barrel. The yield on the benchmark 10 year U.S. Treasury note is presently fetching 4.276%. U.S. economic data due for release Tuesday includes the weekly Johnson Redbook retail sales report, durable goods orders, the monthly house price index, the consumer confidence index and the Richmond Fed business survey.

Technically, the gold futures bears have the slight overall near term technical advantage. Prices are in a three month old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at the February high of $2,083.20. Bears' next near term downside price objective is pushing futures prices below solid technical support at $2,000.00. First resistance is seen at last week’s high of $2,053.20 and then at $2,061.00. First support is seen at this week’s low of $2,034.10 and then at $2,025.00. Wyckoff's Market Rating: 4.5. The silver bears have the overall near term technical advantage. Silver bulls' next upside price objective is closing March futures prices above solid technical resistance at the February high of $23.56. The next downside price objective for the bears is closing prices below solid support at the February low of $21.975. First resistance is seen at $23.00 and then at $23.20. Next support is seen at this week’s low of $22.455 and then at $22.00. Wyckoff's Market Rating: 3.5.

Gold prices moved up on Tuesday as the US dollar and Treasury yields lacked momentum, while investors await key inflation reading and comments from Federal Reserve officials this week. Spot gold firmed 0.3% at $2,035.92 per ounce as of 9:35 a.m. ET (1435 GMT). US gold futures rose 0.3% to $2,044.10 per ounce. The dollar index was subdued and benchmark 10-year Treasury yield slipped, making bullion more attractive for overseas buyers. A slight uptick in inflation data will pressure the gold market but it is well supported at the $2,000 level by central bank buying. It is unlikely Fed officials will change their stance until more data, said Phillip Streible, chief market strategist at Blue Line Futures, in Chicago.

Gold prices were slipping 0.4% to $2,041.7 a troy ounce. Macquarie analysts said the near-side scope for further price rises is small, and expectations for a March rate cut from the Fed were too high coming into the year. However, with Fed Funds futures now pricing three to four 25bps cuts, starting from June, risks have become more balanced. Gold's recent performance has been impressively resilient with much of its outperformance likely driven by strong physical demand, particularly from China. However, given the inverse relationship between price and physical demand changes, this is unlikely to increase prices any time soon. Instead, expect a more beneficial macrofinancial backdrop later this year, driving prices to fresh highs.

Gold futures are currently trading at $2,044.10 per ounce, up 0.3% from Monday's closing price of $2,035.92. Silver futures are trading at $22.70 per ounce, up 0.174% from Monday's closing price of $22.526. The U.S. dollar index is currently trading at 97.89, down 0.04% from Monday's closing price of 97.93. The 10-year U.S. Treasury yield is currently trading at 4.276%, up 0.002% from Monday's closing price of 4.274%.

The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are slightly down and trading around $77.25 a barrel. The yield on the benchmark 10 year U.S. Treasury note is presently fetching 4.276%. U.S. economic data due for release Tuesday includes the weekly Johnson Redbook retail sales report, durable goods orders, the monthly house price index, the consumer confidence index and the Richmond Fed business survey.