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Silver bulls run out of gas fast; gold follows lower

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(Kitco News) - Gold and silver futures prices are trading sharply lower in midday U.S. trading Tuesday, with silver leading the way. It appears the attempted short-squeeze in the silver market has quickly fizzled. Rallying global equity markets early this week are also a bearish element for the safe-haven metals. April gold futures were last down $26.10 at $1,837.80 and March Comex silver was last down $2.768 at $26.65 an ounce.

Silver’s huge pullback from Monday’s eight-year high of $30.35 in the March futures suggests retail trader efforts to produce a short squeeze have failed fast. The big jump in silver futures caught the attention of the Commodity Futures Trading Commission (CFTC), with acting Chairman Rostin Behnam saying the futures regulator is “closely monitoring” the activity. The Comex raised trading margins on silver futures this week.

Global stock markets were mostly firmer overnight. U.S. stock indexes are higher at midday and have made strong recoveries after the recent declines. Traders and investors are more upbeat this week on news that the Covid-19 pandemic, while still gripping many countries, is showing some signs of peaking in the U.S. and Europe as vaccines continue to be distributed to populations, but not without some serious bottlenecks. Also, marketplace attention is on a new pandemic relief package that is likely to pass the U.S. Congress in the coming weeks. It also appears the GameStop and “Redditor” trade saga has died down, at least for now, as the marketplace again focuses on corporate earnings reports and upcoming economic data that includes Friday’s U.S. employment situation report.

The key “outside markets” today see the U.S. dollar index higher and hitting a seven-week high overnight. Importantly, the USDX is now trending higher on a near-term basis and some of the major currency futures markets are now in fledgling near-term price downtrends, while others have at least seen their price uptrends stall. Meantime, Nymex crude oil futures prices are solidly higher, hit a more-than-12-month high overnight and trading around $54.65 a barrel. The yield on the benchmark 10-year U.S. Treasury note stands at 1.11%.

Live 24 hours gold chart [Kitco Inc.]

Technically, April gold futures bulls and bears are back on a level overall near-term technical playing field amid the recent choppy trading. Bulls’ next upside price objective is to produce a close above solid resistance at $1,900.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the January low of $1,804.70. First resistance is seen at $1,850.00 and then at today’s high of $1,866.30. First support is seen at today’s low of $1,830.40 and then at $1,821.30. Wyckoff's Market Rating: 5.0

Live 24 hours silver chart [ Kitco Inc. ]

March silver futures bulls ran out of gas after pushing prices to an eight-year high Monday. The silver bulls still have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at this week’s high of $30.35 an ounce. The next downside price objective for the bears is closing prices below solid support at $25.00. First resistance is seen at $27.00 and then at $27.77. Next support is seen at today’s low of $26.46 and then at $26.00. Wyckoff's Market Rating: 6.5.

March N.Y. copper closed down 165 points at 353.05 cents today. Prices closed near mid-range today and closed at a four-week low close. The copper bulls still have the firm overall near-term technical advantage but have faded. A price uptrend on the daily bar chart has been negated and prices have been trending down for three weeks. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the January high of 373.40 cents. The next downside price objective for the bears is closing prices below solid technical support at 340.00 cents. First resistance is seen at this week’s high of 358.50 cents and then at 360.00 cents. First support is seen at last week’s low of 349.10 cents and then at 345.00 cents. Wyckoff's Market Rating: 7.0.

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.