Markets won’t be back in full swing until next week but we’re getting a bit of a teaser of what the focus will be today already. US futures are running higher but it is once again commodities that are hogging the spotlight, in particular precious metals. After melting higher in December, we’re starting to get a taste of that again to start the new year with both gold and silver running up today.
The former is up nearly 2% to $4,393 with the latter up over 4% to $74.38. The gains have largely been sustained in European morning trade, with buyers not getting too carried away just yet amid quieter trading. In part, the technicals are also hinting at some near-term resistance perhaps despite all the heat.
As indicated by the charts above, both gold and silver are running up to contest their respective 100-hour moving average (red line) now.
The silver chart looks more promising after buyers looked to have put on a defense around the 200-hour moving average (blue line) after the latest pullback from the post-Christmas highs.
As for gold, its own 200-hour moving average (blue line) now acts as a second near-term resistance layer in limiting the upside. But if buyers can clear the $4,400 mark, it will be a good first step in reestablishing momentum to chase back the recent highs above $4,500 to start the new year.
The seasonal strength for gold in December played out accordingly and what is scary is that January promises to be an even stronger seasonal month for the precious metal. That especially since the period after the Covid pandemic. So, just take note of that.
Gold put on a solid December showing in gaining 2.5% on the month and is up over 33% since August last year. The numbers for silver look even more absurd with 27% gains in December and it being up 102% since August last year
