Gold, silver holding on to Wed. price gains amid easy Fed policy
(Kitco News) - Gold and silver prices are modestly up in early 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. However, gains in the safe-haven metals are being limited today by rising U.S. government bond yields. April gold futures were last up $3.00 at $1,730.00 and May Comex silver was last up $0.142 at $26.20 an ounce.
Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward mixed to lower openings when the New York day session begins, on some mild profit taking after the Dow and S&P 500 stock indexes hit record highs Wednesday.
U.S. Treasury bond yields are on the rise again and the U.S. Treasury 10-year Treasury note yield hit 1.74% overnight--the highest level in well over a year. This is giving U.S. stock market traders pause Thursday morning.
Traders and investors are still digesting the Federal Reserve's two-day Open Market Committee (FOMC) meeting that ended Wednesday afternoon. 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.
On the geopolitical front, the markets are not reacting much to news that President Biden has labeled Russian President Putin a "killer."
The key "outside markets" today see Nymex crude oil futures prices a bit lower and trading around $64.35 a barrel. Meantime, the U.S. dollar index is firmer early today.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, and leading economic indicators.
Technically, the April gold futures bears have the overall near-term technical advantage. However, a nine-week-old price downtrend line on the daily chart has been negated. Bulls' next upside price objective is to produce a close in April futures 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 $1,738.00 and then at $1,750.00. First support is seen at this week's low of $1,719.20 and then at $1,700.00. Wyckoff's Market Rating: 3.5
May silver futures bears have the slight overall near-term technical advantage. Prices are 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 the overnight 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.