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Metals bulls maintain control

Commentaries & Views

After an intraday run to $1902, on the back of two weeks' worth of steady upward momentum and a late-day injection of renewed geopolitical jitters, the yellow metal has come back down to trade at $1,892, as of this writing.

Silver trades at $23.90 this morning, having retested its weekly high of $24 in overnight trading. Silver seems to be lagging gold early in this breakout move in metals, which is typical price action; should gold bulls continue to power higher, it would be reasonable to expect a "catch up" trade-in silver sometime in the future.

Platinum was rejected at $1,100 overnight and trades at minor support of $1,080 this morning. $1,065 is the greater support level for platinum, which bulls would likely stand ready to defend. Palladium continues to trade over $2,300, consolidating above the level, which bodes well for long position holders.

Weekly closes over minor support at $1,880 for gold and $23.80 for silver would inspire confidence that the metals are ready to make a run to $1,915 and $24.50, respectively. However, a cooling-off period, whereby metals "exhale" within a price consolidation zone above recent support should be expected. In this trader's opinion, consolidation would still align with a bullish medium-term outcome.

With the U.S. Treasury market having caught a bid yesterday and the 10-year yield back under 2%, risk in the equity market from a credit sensitivity perspective is showing signs of coming down in the immediate term. Since treasuries were bid as a function of a safety trade on concerns of war, it is reasonable to expect that geopolitical de-escalation would lead to cash flowing back out of bonds and into stocks, which have yet to make a lower low than the one hit on January 24, despite having been put under pressure by a hawkish federal reserve, the banging of war drums, and 10-year yield floating around months-long highs.

Thanks, and have a great weekend.

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.