Gold sinks to 8-mo. low on technical selling, rally in USDX
(Kitco News) - Gold futures prices are sharply down and hit an eight-month low in midday U.S. trading Wednesday. A stronger U.S. dollar index on this day and a deteriorating near-term technical posture in gold emboldened the sellers in the yellow metal today. The gold and silver markets are also seeing limited buying interest in a world that is presently void of a major “international incident” and in which global stock markets are mostly robust. Rising government bond yields are another negative for gold and silver. April gold futures were last down $24.40 at $1,774.80 and March Comex silver was last up $0.005 at $27.33 an ounce.
Global stock markets were mostly firmer overnight. Mainland China markets remain closed for the Lunar New Year holiday but will open Thursday. U.S. stock indexes are mixed at midday. There remains little risk aversion in the marketplace, what with the pandemic loosening its grip on many major countries and economies expected to rebound strongly as this year progresses.
Bitcoin hit another record high Wednesday and traded well above $50,000. The keener investor interest in Bitcoin and other crypto currencies could be taking away some of the allure for historical safe-haven assets gold and silver.
The platinum futures market this week hit a 6.5-year high. An email dispatch from the broker SP Angel said the following: “Europe takes the lead in the race for hydrogen in a move which will likely drive platinum prices higher. Most of the world’s planned hydrogen projects and the biggest chunk of related investments this decade are expected to be in Europe. The EU has made hydrogen a key plank in its aim to eliminate greenhouse gas emissions by 2050, with plans to install 40GW of electrolyzers this decade. Of the 228 hydrogen projects announced globally, 55% of them (126) are in Europe. Hydrogen Council members--including Royal Dutch Shell Plc, BMW, Microsoft Corp and Sinopec--plan to increase hydrogen investments six-fold through to 2025, from 2019 levels. Platinum catalysts for reforming hydrogen and for fuel cells are likely to see increasing demand from the new drive to produce and use hydrogen.”
The key “outside markets” today see the U.S. dollar index trading higher. Meantime, Nymex crude oil futures prices are higher and trading around $60.50 a barrel. The benchmark 10-year U.S. Treasury note yield is currently fetching around 1.289%.
Technically, April gold futures bears have the firm overall near-term technical advantage and have gained fresh power this week. Prices are in a six-week-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at this week’s high of $1,827.10. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,750.00. First resistance is seen at today’s high of $1,794.20 and then at $1,800.00. First support is seen at today’s low of $1,767.90 and then at $1,760.00. Wyckoff's Market Rating: 3.0
March silver futures bulls have the overall near-term technical advantage amid a price uptrend in place on the daily chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the February high of $30.25 an ounce. The next downside price objective for the bears is closing prices below solid support at $26.00. First resistance is seen at this week’s high of $28.075 and then at $28.50. Next support is seen at last week’s low of $26.75 and then at $26.50. Wyckoff's Market Rating: 6.5.
March N.Y. copper closed down 155 points at 381.85 cents today. Prices closed near mid-range today on mild profit taking after hitting a contract and eight-year high on Tuesday. The copper bulls have the strong overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 390.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 365.00 cents. First resistance is seen at the contract high of 384.50 cents and then at 387.50 cents. First support is seen at today’s low of 379.40 cents and then at 375.00 cents. Wyckoff's Market Rating: 8.5.