Gold and silver prices are down slightly in early U.S. trading Monday, with silver’s near-term chart posture deteriorating more than gold. This downturn is leading to some technical selling. However, gold and silver bulls are anticipating for some favorable fundamental news with this week’s major economic data.
February gold was last down $4.40 at $2,010.10, while March silver was last down $0.041 at $23.235. U.S. stock indexes are also expected to open lower at the start of the New York trading session. The Federal Reserve will announce its latest monetary policy meeting (FOMC) results mid-week, and U.S. inflation data will be released this week. The European Central Bank will hold its regular monetary policy meeting on Thursday.
China reported a 0.5% decline in its November consumer price index year-on-year, with food prices falling 4.2% in the same period. In addition, China’s CPI is up 0.3% so far this year, indicating global inflation is cooling off.
Looking ahead, the bond market is anticipating big U.S. Treasury bond and note auctions on Monday and Tuesday. Traders are keen to observe sales, especially considering the U.S. government’s plans to sell over $20 trillion of its debt this year. Some market watchers are concerned about the sustainability of this trend without causing serious disruption.
Moreover, Nymex crude oil prices are weaker and trading around $70.50 a barrel, while the yield on the benchmark U.S. Treasury 10-year note is fetching 4.26%. In terms of economic data, the employment trends index is due for release Monday, followed by the consumer price index report on Tuesday and the beginning of the two-day FOMC meeting of the Federal Reserve.
Technically, gold futures bulls still have the overall near-term technical advantage, but the near-term market top has weakened. This is evident from a two-month-old uptrend on the daily bar chart. On the contrary, the silver bulls have lost their overall near-term technical advantage, indicating a temporary negation of the two-month-old uptrend.
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