The gold market experienced a slight decrease in early U.S. trading on Monday, amid a stronger U.S. dollar index and weaker crude oil prices. However, silver prices were up, with March silver trading at $23.015. The U.S. stock indexes near record highs also played a role in the dip for gold and silver markets.
Overnight trading in Asian and European markets was mixed, with China largely closed for the Lunar New Year holiday. The year of the Dragon has been celebrated in China, with reports of jewelry sales increasing by an estimated 30%, leading to an expected rise in gold prices. Additionally, officials are hoping the favorable influence of the dragon will encourage couples to raise the birth rate.
Looking at other markets, U.S. stock index futures were set to open mixed, with the U.S. dollar index slightly firmer and Nymex crude oil prices trading around $76.25 a barrel. The benchmark 10-year U.S. Treasury note is also fetching 4.162%.
In the midst of light economic data due for release Monday, U.S. Treasury budget statement is on the horizon. However, the data pace picks up Tuesday, including the release of the consumer price index report for January, expected to come in at up 2.9%, year-on-year.
From a technical standpoint, gold futures bulls still have a slight overall near-term technical advantage, with resistance seen at $2,050.00 and then at last week’s high of $2,059.10. On the other hand, the silver bears have the overall near-term technical advantage, with prices in a nine-week-old downtrend on the daily bar chart.
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In conclusion, gold and silver markets are under pressure from bearish daily outside markets, but silver prices are showing resilience. Additionally, the Lunar New Year holiday in China is affecting trading in Asian markets. There are expectations for gold prices to rise due to an increase in dragon-themed gold jewelry sales in China. Furthermore, the technological analysis indicates that gold futures bulls have the overall near-term advantage, while the silver bears hold the advantage in the near term. Therefore, there are mixed signals in the precious metals markets, and it will be interesting to see how these markets play out in the coming days.
