Gold prices sharply down as dread pervasive in marketplace
Editor's Note: Get caught up in minutes with our speedy summary of today's must-read news stories and expert opinions that moved the precious metals and financial markets. Sign up here!
(Kitco News) - Gold and silver prices are trading sharply lower in midday U.S. trading Wednesday, as buyers of most markets stand on the trading sidelines, afraid to jump in, amid the spreading economic doom coming from the coronavirus outbreak. Silver prices slumped to an 11-year low today. April gold futures were last down $40.30 an ounce at $1,486.10. May Comex silver prices were last down $0.70 at $11.795 an ounce.
U.S. stock index futures stood locked limit down at midday Wednesday. In a sign of the stresses traders and investors are presently enduring, big hedge fund manager Bill Ackman phone into CNBC television and made an impassioned plea for the President Trump to shut down the federal government and the U.S. work for 30 days, so save the economy from ruin.
Global stock markets were also solidly down in overnight. A more-than-$1 trillion U.S. aid package for U.S. consumers and businesses is so far not assuaging trader and investor confidence at mid-week. Instead, they are considering the consequences of a North American way of life that has been turned upside down. Most retail businesses, schools and universities are closed and streets are seeing much less traffic. Major corporations such as Boeing and U.S. airlines are teetering on bankruptcy. The U.S. Treasury and commercial paper markets are not functioning well despite massive infusions of funds from the Federal Reserve. U.S. Treasury Secretary Mnuchin on Tuesday warned the U.S. unemployment rate could reach 20%. Considering all of the above and knowing that markets have historically factored into their prices major events’ repercussions before they ever fully play out, veteran market watchers are wondering when the worst of this crisis will come to pass, from a markets perspective. At mid-week it appears the markets are saying, “not yet.”
There was some hope late Tuesday that the sharp rise in the 10-year U.S. Treasury note yield back above 1.0% was indicating the government bond market was reckoning the worst of the coronavirus market damage has passed and that the panic in the marketplace had receded. However, looking at the sharply lower U.S. Treasury bond and Treasury note futures prices overnight it appears the rising bond yields are more a case of serious dislocations in that market as opposed to an easing of trader and investor market fears. Wednesday morning the 10-year Treasury note was yielding 1.13%.
The U.S. dollar index is strongly higher in midday U.S. trading and hit a three-year high, as the greenback is still the “go to” asset when shit hits the fan. Nymex crude oil futures prices are solidly down and hit a 17-year low of $22.04 a barrel.
Reports said one U.S. hedge fund manager, Malachite, Management LLC, has closed down, citing “extreme, adverse market conditions.” Reports said the firm specialized in trading volatility. Apparently in these trying times at least one firm should not get what one asks for.
The Commodity Futures Trading Commission has relaxed some of its rules for brokerages, to help them deal with the extreme markets moves that are occurring daily.
In another sign of the times, this afternoon’s conclusion of the Federal Reserve’s Open Market Committee meeting (FOMC) is nowhere near the front burner of the marketplace today, when normally it’s one of the market highlights of the month.
Technically, April gold futures bears have the firm overall near-term technical advantage. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,600.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at this week’s low of $1,450.90. First resistance is seen at $1,500.00 and then at $1,525.00. First support is seen at today’s low of $1,482.60 and then at Tuesday’s low of $1,465.60. Wyckoff's Market Rating: 3.0
May silver futures bears have the solid overall near-term technical advantage as a steep price downtrend is in place on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $14.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $11.00. First resistance is seen at today’s high of $12.905 and then at $13.23. Next support is seen at today’s low of $11.685 and then at $11.50. Wyckoff's Market Rating: 1.0.
May N.Y. copper closed down 1,585 points at 215.55 cents today. Prices closed nearer the session low today and hit another three-year low. The copper bears have the solid overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at today’s high of 234.15 cents. The next downside price objective for the bears is closing prices below solid technical support at 200.00 cents. First resistance is seen at 220.00 cents and then at 225.00 cents. First support is seen at today’s low of 213.90 cents and then at 210.00 cents. Wyckoff's Market Rating: 1.0.