Gold, silver socked by rising bond yields
(Kitco News) - Gold and silver futures prices are solidly lower in midday U.S. trading Wednesday. Gold notched a nine-month low early on today but are now trading near the day's mid-range as some bargain hunters stepped in to buy the big dip. A rally in crude oil prices today also helped to bring gold and silver markets up from their daily lows. However, rising U.S. government bond yields, which are near last week's 12-month high, and a mild bounce in the U.S. dollar index at mid-week are negative outside forces working against the precious metals markets. The shorter-term, chart-based futures traders are also piling on the sell side of gold and silver at present, due to their deteriorating near-term technical postures. April gold futures were last down $17.20 at $1,716.50 and May Comex silver was last down $0.509 at $26.375 an ounce.
Traders and investors will continue to keep one eye on government bond yields, which have been generally rising recently, and which have made stock markets wobbly at times. The U.S. Treasury 10-year note is presently trading around 1.486% for its yield. Many veteran market watchers believe U.S. Treasury yields will continue to climb in the coming months.
A big rally in Bitcoin prices today, to back above $50,000, is also likely reducing any would-be gold and silver buyers' interest.
The U.S. data point of the day was the ADP national employment report for February, which came in at up 117,000, which was a downside miss from the expected rise of 225,000 jobs, and compares to a 174,000 gain in January. This report is a precursor to Friday morning's employment situation report from the U.S. Labor Department—arguably the most important U.S. economic report of the month.
Global stock markets were mostly up overnight. U.S. stock indexes are mixed at midday. Marketplace attitudes are upbeat at mid-week after President Biden said on Tuesday all Americans wanting a Covid vaccine should be able to get one by the end of May. Also, the U.S. government is getting closer to rolling out its newest pandemic assistance package that totals $1.9 trillion. "We can see light at the end of the tunnel of the pandemic," said one market analyst. The safe-haven metals markets are getting no support from the above notions.
The key "outside markets" today see Nymex crude oil futures prices solidly higher and trading around $62.00 a barrel. There is an OPEC meeting on Thursday that the marketplace will closely monitor. It could be that with oil prices above $60 a barrel that the cartel opens up its oil spigots some more, after curbing production in recent months to prop up prices. The U.S. dollar index is firmer at midday today.
Technically, April gold futures prices hit a nine-month low early on today. The gold bears still have the solid overall near-term technical advantage. Prices are in a two-month-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 $1,757.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,650.00. First resistance is seen at $1,725.00 and then at today's high of $1,739.10. First support is seen at today's low of $1,699.40 and then at $1,680.00. Wyckoff's Market Rating: 2.0
May silver futures bulls have lost their slight overall near-term technical advantage as a five-week-old price uptrend on the daily chart has been negated. Silver bulls' next upside price objective is closing prices above solid technical resistance at $28.47 an ounce. The next downside price objective for the bears is closing prices below solid support at $25.00. First resistance is seen at today's high of $29.915 and then at this week's high of $27.175. Next support is seen at $26.00 and then at this week's low of $25.82. Wyckoff's Market Rating: 5.0.
May N.Y. copper closed down 800 points at 414.25 cents today. Prices closed near the session low today and saw routine profit taking. The copper bulls still have the solid overall near-term technical advantage. Prices are in a 12-month-old uptrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 440.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 390.00 cents. First resistance is seen at this week's high of 422.75 cents and then at 425.00 cents. First support is seen at 410.00 cents and then at this week's low of 404.15 cents. Wyckoff's Market Rating: 8.0.