News 24K99 On Tuesday (January 3), the price of gold performed strongly in early 2023, testing the $1,850 mark. The precious metal generated uncharacteristic momentum into the new year, erasing all of its losses for 2022 before going flat. Can Gold Hit $1,900 in Q1 as the New Year Starts?
Gold’s sister product, silver, also rallied into the new year. Silver has also erased all of its losses for 2022, having gained about 8% last year.
The precious metals market rallied sharply despite the dollar rising on the first trading day of 2023.
The US dollar index hit a high of 104.86 at one point, up more than 1% on the day. The index has increased by approximately 9% over the past year, which is a very good performance. But the index was up as much as 20% at one point before the Fed took a less hawkish stance.
A stronger dollar is generally negative for dollar-denominated commodities because it makes the purchase of commodities more expensive for foreign investors.
The US Treasury market was broadly lower, with the benchmark 10-year yield down 8.6 basis points to 3.745%. The one-month note rose 2 basis points to 4.024%, while the 30-year note fell 9.4 basis points to 3.844%. The spread between two-year and 10-year yields, which signals a recession, has widened to nearly -70 basis points.
“Concerns about inflation, central bank monetary policy and the Russia-Ukraine war are likely to remain the top concerns for markets in 2023,” Kitco News metals analyst Jim Wycoff wrote in a note.
“Technically, bulls in gold futures have a solid overall short-term technical advantage. Prices are in a two-month uptrend on the daily histogram. The bulls’ next upside target is a breakout at February futures close Solid resistance at $1900.00 Bears next short-term downside target pushes futures below solid technical support at $1775.00 First resistance seen at $1850.00 , then today’s high of $1856.60.
Meanwhile, investors will keep an eye out for the December nonfarm payrolls report due out this week, which could deliver two big messages: the labor market is slowing down, while headline data could support a slower pace of rate hikes by the Federal Reserve.
FXDailyReport wrote an article to analyze and predict the performance of gold, silver and crude oil and provided an operating strategy:
Gold: Successful breach of the $1850 level
After a strong upward momentum, gold prices managed to reach the $1850 resistance today. If the price initiates a bearish correction from the current levels, it will target the $1780-$1800 area. When a retest occurs and a bullish reaction, traders can prepare to take long positions around this area. On the other hand, if the price closes below $1,780 or the 200-day moving average, the bearish move could gain more momentum.
(Gold Daily Chart, Source: FXDailyReport)
Support: 1700, 1680, 1600, 1585
Resistance: 1780, 1800
Silver: Further gains above $23.90
Silver prices surged above $23.90 today in strong bullish momentum. Going forward, Silver should reach towards the $25.00-$26.00 area and traders would be wise to avoid initiating short positions, at least until there is a significant bearish price reaction. On the downside, if the price falls towards $23.90 or $23.00, traders can use this level to open long positions.
(Silver Daily Chart, source: FXDailyReport)
Support: 21.35, 20.00, 18.50, 17.73
Resistance: 11.00pm, 11.90pm
Crude Oil: Under bearish pressure
Crude oil prices are under renewed downward pressure after losing their bullish momentum. Oil prices could continue lower and retest the $77.13 level. If the price dips below this level, traders could expect further declines targeting new lower lows below the $70.00 handle. Until the charts show higher highs, there is no reason for traders to turn bullish.
(Crude Oil Daily Chart, Source: FXDailyReport)
Support: 77.13, 70.00
Resistance: 80.00, 85.00, 90.00, 95.25
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