Gold, silver gain on follow-through strength from good gains Wed.
(Kitco News) - Gold and silver prices are moderately up in choppy, two-sided U.S. trading Thursday, and are hanging on to the good gains posted Wednesday in the wake of a dovish U.S. central bank stance reiterated Wednesday afternoon. The ability of gold and silver to hold Wednesday's gains and even add a bit to them is a positive sign for price action in the near term. However, gains in the safe-haven metals are still being limited today by rising U.S. government bond yields. April gold futures were last up $5.40 at $1,732.50 and May Comex silver was last up $0.287 at $26.34 an ounce.
U.S. Treasury bond yields are on the rise again and the U.S. Treasury 10-year Treasury note yield hit 1.75% Thursday--the highest level in well over a year. This is giving U.S. stock market traders pause.
Traders and investors are still digesting the Federal Reserve's Open Market Committee (FOMC) meeting held this week. The FOMC statement said U.S. monetary policy had not changed, as expected (Fed funds rate seen at median 0.1% until the end of 2023.), but added U.S. economic growth and inflation prospects are picking up steam. The Fed raised its U.S. GDP projection to 6.5% growth in 2021, from 4.2%, and sees inflation at 2.4% annually in 2021, versus its last estimate of up 1.8%. The central bank said it will continue its present bond-buying program (quantitative easing) until substantial further progress is made on the Fed's economic goals. The marketplace deemed the FOMC meeting and Fed Chairman Powell's remarks in his press conference as favoring the dovish side of monetary policy more than expected, and a goldilocks scenario for the stock market. Still, many veteran market watchers think the Fed will be forced to raise U.S. interest rates before the two-year window has ended, given the present trajectory of U.S. inflation. A "hot" Philadelphia Fed business survey on Thursday furthered those notions.
On the geopolitical front, the markets are not reacting much (yet) to news that President Biden has labeled Russian President Putin a "killer." The Kremlin shot back and said Biden needs to apologize. Many reckon this is the start of a new "cold war" between the U.S. and Russia.
The key "outside markets" today see Nymex crude oil futures prices sharply lower and trading around $62.21 a barrel. Meantime, the U.S. dollar index is higher today. These two markets are in a bearish daily posture for the metals markets.
Technically, April gold futures bears still have the overall near-term technical advantage. However this week's price gains suggest a market bottom is in place, as a nine-week-old downtrend line on the daily bar chart has been negated. Bulls' next upside price objective is to produce a close above solid resistance at $1,775.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the March low of $1,673.30. First resistance is seen at $1,740.00 and then at $1,750.00. First support is seen at today's low of $1,716.60 and then at $1,700.00. Wyckoff's Market Rating: 3.5
May silver futures prices hit a two-week high today. The silver bears have the slight overall near-term technical advantage. Prices are still in a six-week-old downtrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $27.50 an ounce. The next downside price objective for the bears is closing prices below solid support at the March low of $24.845. First resistance is seen at today's high of $26.74 and then at $27.00. Next support is seen at this week's low of $25.805 and then at $25.425. Wyckoff's Market Rating: 4.5.
May N.Y. copper closed down 40 points at 411.50 cents today. Prices closed near mid-range today. The copper bulls still have the firm overall near-term technical advantage. However, a 12-month-old uptrend on the daily bar chart has stalled out, at least temporarily. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the February high of 437.55 cents. The next downside price objective for the bears is closing prices below solid technical support at the March low of 384.90 cents. First resistance is seen at today's high of 415.70 cents and then at this week's high of 419.00 cents. First support is seen at this week's low of 405.65 cents and then at 400.00 cents. Wyckoff's Market Rating: 7.0.