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Gold, Silver Prices Drop On Higher U.S. Dollar, Better Risk Appetite

Kitco News

(Kitco News) - Gold and silver prices were solidly lower in midday U.S. trading Wednesday. A rebound in the U.S. dollar index at mid-week and an uptick in investor risk appetite today had the sellers of the metals in control. April Comex gold futures were last down $15.60 an ounce at $1,326.40. May Comex silver was last down $0.276 at $16.265 an ounce.

While world stock markets were mostly lower overnight, after the U.S. stock indexes took a downside hit Tuesday, the U.S. indexes stabilized at midday today. However, world stock markets have become wobbly again. There are mounting technical clues the U.S. stock indexes have put in major tops. Such would be a longer-term bullish development for the gold and silver markets, which are a competing asset class with equities.

Today’s final revision of the four-quarter U.S. gross domestic product showed a rise of 2.9% on an annual basis, which beat market expectations for a growth rate of 2.7% and was better than the last estimate for the fourth quarter, which showed a rise of 2.5%. Today’s rise in 4Q GDP compares with a rise of 3.2% in the third quarter and a gain of 3.1% in the second quarter of 2017. Economists are optimistic U.S. GDP growth can remain above 3.0% in 2018, due to corporate tax cuts adding to an already strengthening U.S. economy.

The key “outside markets” on Wednesday saw the U.S. dollar index solidly higher. Trading in the USDX has been choppy recently, but the near-term price trend remains sideways to lower. Meantime, Nymex crude oil prices were down on more profit taking from recent gains, and trading just above $64.00 a barrel.

Live 24 hours gold chart [Kitco Inc.]

Technically, April gold futures bulls still have the slight overall near-term technical advantage, but are fading and need to show fresh power soon to keep it. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,356.80. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,300.00. First resistance is seen at $1,330.00 and then at $1,335.00. First support is seen at today’s low of $1,324.50 and then at $1,320.00. Wyckoff's Market Rating: 5.5

Live 24 hours silver chart [ Kitco Inc. ]

May silver futures bears have the overall near-term technical advantage and have regained downside momentum. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.00 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 today’s high of $16.56 and then at this week’s high of $16.81. Next support is seen at today’s low of $16.23 and then at the March low of $16.10. Wyckoff's Market Rating: 3.0.

May N.Y. copper closed up 30 points at 300.35 cents today. Prices closed nearer the session high today and saw more short covering after hitting a six-month low on Monday. The copper bears have the overall near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 310.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the September low of 293.25 cents. First resistance is seen at this week’s high of 302.40 cents and 305.00 cents. First support is seen at today’s low of 296.85 cents and then at this week’s low of 293.75 cents. Wyckoff's Market Rating: 4.0.

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.