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Gold sees more downside price action amid rising bond yields

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(Kitco News) - Gold futures prices are lower again in early U.S. trading Thursday. Rising government bond yields are at least short-term bearish for the precious metals markets as the benchmark U.S. Treasury note is presently yielding 1.45%, which is a one-year high. The shorter-term, chart based futures trader bears are having their way with the gold market at present. Silver is another story, as the metal still sees a near-term price uptrend in place and the silver bulls are much more resilient recently. April gold futures were last down $12.00 at $1,786.00 and March Comex silver was last up $0.096 at $27.97 an ounce.

Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. The discussion in the marketplace at present centers on global inflation prospects, with most traders reckoning inflation is up-ticking. The key question is how high will price inflation rise and will it become problematic. Government bond yields are trending up. Stock market bulls have taken note of the rising bond yields and are a bit worried about it. At least one big Wall Street investment bank is predicting a “commodity super-cycle” is just under way that will see raw commodity prices appreciate for quite some time to come. Many commodity futures markets such as the grains, crude oil and some softs have seen their prices hit multi-month and even multi-year highs this year.

Federal Reserve Chairman Jay Powell’s testimony to the U.S. Congress this week saw the central bank chief reiterate that U.S. money policy will remain very easy until U.S. employment has reached more normal levels coming out of the pandemic. This did work to assuage the stock index bulls a bit as prices have rebounded from early-week lows.

The key “outside markets” today see Nymex crude oil futures prices slightly up and trading around $63.30 a barrel. The U.S. dollar index is lower early today as the bulls have faded recently.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the second estimate of four-quarter gross domestic product, durable goods orders, pending home sales and the Kansas City Fed manufacturing survey.

Live 24 hours gold chart [Kitco Inc.]

Technically, the February gold futures bears have the firm overall near-term technical advantage amid a six-week-old price downtrend in place on the daily chart. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at this week’s high of $1,815.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the February low of $1,759.00. First resistance is seen at $1,800.00 and then at today’s high of $1,805.00. First support is seen at this week’s low of $1,778.60 and then at the November low of $1,771.30. Wyckoff's Market Rating: 3.0

Live 24 hours silver chart [ Kitco Inc. ]

March silver futures bulls have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the February high of $30.35 an ounce. The next downside price objective for the bears is closing prices below solid support at $26.00. First resistance is seen at the overnight high of $28.265 and then at this week’s high of $28.425. Next support is seen at this week’s low of $27.33 and then at $27.00. Wyckoff's Market Rating: 6.5.

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