Gold Punished By Hawkish New Fed Chief
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(Kitco News) - Gold prices were ending the U.S. day session solidly lower and hit a two-week low Tuesday. The precious metals bulls got punched in the nose by new Federal Reserve Chairman Jerome Powell, who sounded a hawkish tone on future U.S. monetary policy. April Comex gold futures were last down $16.00 an ounce at $1,316.80. March Comex silver was last down $0.212 at $16.41 an ounce.
Powell’s testimony to the U.S. House of Representatives on Capitol Hill was the feature in the marketplace so far this week. Powell said the Fed remains on pace to gradually raise U.S. interest rates, amid increasing economic growth and rising inflation. He said the U.S. economy has strengthened even since December and that the risk of an economic recession is low. Powell also said the recent stock market volatility is not a significant detriment to the U.S. economy.
The U.S. dollar index rallied to a two-week high on Powell’s hawkish-construed testimony. The U.S. stock market and U.S. Treasuries were also pressured by the Fed chief’s remarks today. Powell speaks to the U.S. Senate on Thursday.
The other key outside market on Tuesday saw Nymex crude oil prices weaker and trading just above $63.00 a barrel. Growing U.S. oil production the past few months is a major factor that is likely to cap oil price advances.
Technically, April gold futures prices closed nearer the session low today. The gold bulls still have the slight overall near-term technical advantage but faded badly today and need to show fresh power soon to keep their chart edge. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,350.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the February low of $1,309.00. First resistance is seen at $1,325.00 and then at $1,330.00. First support is seen at today’s low of $1,314.40 and then at $1,309.00. Wyckoff's Market Rating: 5.5
March silver futures prices closed nearer the session low and hit a two-week low today. The silver bears have the overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the February high of $17.04 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at $16.50 and then at today’s high of $16.72. Next support is seen at today’s low of $16.34 and then at the February low of $16.21. Wyckoff's Market Rating: 4.0.
March N.Y. copper closed down 380 points at 318.60 cents today. Prices closed nearer the session low. The copper bulls still have the firm overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the December high of 333.35 cents. The next downside price objective for the bears is closing prices below solid technical support at the February low of 304.65 cents. First resistance is seen at 320.00 cents and then at today’s high of 323.70 cents. First support is seen at today’s low of 316.30 cents and then at 315.00 cents. Wyckoff's Market Rating: 6.5.