Metals trade sideways while stocks gain momentum
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
There has been no change in the chart pattern for the yellow metal. The sideways action persists, as we suggested was the most likely outcome for the short term. The bullish view is that as long as the $1,915 - $1,925 level continues to hold, a test of overhead resistance at $1,965 remains the probability. However, traders should be prepared for that converse scenario of a flush out below $1,900.
Hawkish comments (as expected) from Federal Reserve Chair Jerome Powell put a damper on the rally in both stocks and the metals yesterday. However, U.S. indices have recouped those losses and futures are pointing to a higher open this morning. The realization that some form of peace in Eastern Europe is the most likely outcome may be starting to creep into general market psychology.
The U.S. 10-year yield is at 2.35% this morning, having reacted to the hawkish talk from the Fed as well. Is it possible that the stock market is beginning to "like" the hawkish Fed talk- believing that they are attempting to stem inflation in the real economy? Or perhaps the market has started pricing in the Fed's eventual reversal back to a dovish position…