Welcome to Kitco News’ 2022 outlook series. The new year will be filled with uncertainty as the Federal Reserve looks to pivot and tighten its monetary policies. At the same time, the inflation threat continues to grow, which means real rates will remain in low to negative territory. Stay tuned to Kitco News to learn from the experts on how to navigate turbulent financial markets in 2022.
(Kitco News) – Gold and silver prices are steady to slightly lower in early U.S. trading Wednesday. The marketplace is in a pause mode ahead of one of the most highly anticipated central bank meetings in years. February gold was last down $0.50 at $1,772.10 and March Comex silver was last down $0.069 at $21.855 an ounce.
All of the major central banks hold monetary policy meetings yet this week, but the main focus is on the U.S. Federal Reserve FOMC meeting that began Tuesday morning ends Wednesday afternoon with a statement and press conference from Fed Chairman Jerome Powell. The FOMC is expected to announce the acceleration of asset purchases tapering, so the Fed can raise interest rates sooner, as the U.S. now has the hottest inflation in nearly 40 years. Specifically, the FOMC is expected to announce it will accelerate tapering asset purchases to $30 billion a month to wind the program down by March. Many analysts and economists believe two U.S. interest rate hikes will occur in 2022.
Global stock markets were mixed in overnight trading. U.S. stock indexes are also pointed toward narrowly mixed openings when the New York day session begins.
In other overnight news there was a stark assessment of the Covid virus and resulting supply chain disruptions heading into the new year. Broker SP Angel in an email dispatch today warned that “we expect the highly transmissible Omicron virus to significantly disrupt supply chains through Q1 next year. Each new dominant variant passes faster and more effectively than the last by their very definition, with Omicron as the latest and most complex variant to take over. While Omicron may prove to be a milder and less deadly virus it is still making people sick and it still takes time / weeks to recover. …We expect ongoing mine disruption to further hit metals production, exacerbating supply / demand deficits and lowering already low LME and SHFE warehouse stock levels.” Other major industries may suffer the same fate in the coming months.
The key “outside markets” today see Nymex crude oil prices lower and trading around $69.50 a barrel. The U.S. dollar index is a bit weaker early today. Meantime, the yield on the U.S. Treasury 10-year note is presently fetching 1.429%.
Other U.S. economic data due for release on a busy Wednesday includes the weekly MBA mortgage applications survey, the Empire State manufacturing survey, retail sales, import and export prices, manufacturing and trade inventories, the NAHB housing market index, Treasury international capital data and the weekly DOE liquid energy stocks report.
![Live 24 hours gold chart [Kitco Inc.]](/images/live/gold.gif?0.2924175530478188){kind=small}
Technically, February gold futures bulls have lost their slight overall near-term technical advantage as trading has been sideways and choppy for two weeks. Bulls’ next upside price objective is to produce a close above solid resistance at $1,800.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,761.00. First resistance is seen at $1,780.00 and then at this week’s high of $1,792.80. First support is seen at the December low of $1,762.20 and then at the November low of $1,761.00. Wyckoff’s Market Rating: 5.0
![Live 24 hours silver chart [ Kitco Inc. ]](/images/live/silver.gif)
The March silver bears have the solid overall near-term technical advantage. Prices hit a 2.5-month low Tuesday. Prices have been trending down for four weeks. Silver bulls’ next upside price objective is closing December futures prices above solid technical resistance at $23.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the September low of $21.46. First resistance is seen at the overnight high of $22.07 and then at this week’s high of $22.43. Next support is seen at this week’s low of $21.67 and then at $21.46. Wyckoff’s Market Rating: 1.5.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.