Slight price gains for gold as Yellen, Powell on deck
(Kitco News) - Gold prices are slightly up in early U.S. trading Tuesday, while silver prices are slightly down. Both metals are likely to tread water this morning ahead of midday remarks by two major U.S. economic officials. However, buying interest in the precious metals will likely remain squelched today amid bearish "outside markets" that include big declines in crude oil prices and a solidly higher U.S. dollar index. April gold futures were last up $1.40 at $1,739.50 and May Comex silver was last down $0.139 at $25.62 an ounce.
The highlight of the trading day starts at midday, when U.S. Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell begin two days of congressional hearings over President Biden's $1.9 trillion stimulus package and his planned $3 trillion infrastructure program. While Republicans say the plan piles up debt and risks stoking inflation with a recovery already underway, Yellen is expected to say even more government spending is needed, partly funded by higher U.S. taxes.
Global stock markets were mostly down overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. Risk aversion is a bit keener Tuesday as Covid-19 infections and business lockdowns are on the rise in Europe again, amid vaccination rollout problems there. Also, tensions among world military and economic powers are up-ticking, as the U.S. and European Union are discussing further sanctioning China over human rights abuses, while at the same time Russia and Chinese government officials meet in a show of unity against the West.
The key "outside markets" today see Nymex crude oil futures prices sharply lower and trading around $59.35 a barrel this morning. The Covid-related lockdowns in Europe have spooked oil traders who fear another big wave of Covid infections could dent oil demand again. Meantime, the U.S. dollar index is solidly higher early today. The U.S. Treasury 10-year note yield is fetching 1.63% Tuesday morning.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the Richmond Fed business survey, and new residential sales.
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 was negated last week, to begin to suggest a market bottom is in place. 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 this week's high of $1,747.00 and then at the March high of $1,754.20. First support is seen at this week's low of $1,726.40 and then at last week's low of $1,716.60. Wyckoff's Market Rating: 3.5
May silver futures bears have the slight overall near-term technical advantage. Prices are in a seven-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 $26.00 and then at this week's high of $26.35. Next support is seen at this week's low of $25.45 and then at $25.00. Wyckoff's Market Rating: 4.5.