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Gold, silver up but lose most of strong early price gains

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(Kitco News) - Gold and silver prices are higher in midday U.S. trading Thursday. However, both metals have backed way off their early spike highs that saw gold hit a 1.5-year high of $1,976.50 and silver a seven-month high of $25.67. Safe-haven demand is featured amid a risk-off trading day in the marketplace, as Russia unleashed a major military attack on its neighboring country, Ukraine. However, by midday most markets had calmed down significantly, including U.S. stock indexes and Treasury markets. April gold futures were last up $14.70 at $1,924.50 and March Comex silver was last up $0.187 at $24.73 an ounce.

Russia initiated a full-blown invasion of Ukraine Thursday, including bombing and missile strikes on key infrastructure and defense installations all over Ukraine. Russian President Putin claimed the attack is an effort to demilitarize Ukraine. Global stock markets sunk sharply on the news, including the U.S. stock indexes. Many major commodity markets saw their prices soar, but then also back way down from their overnight highs by midday. Russia is a major raw commodity exporter, and Russia and Ukraine are major grain exporters. Nymex and Brent crude oil futures pushed above $100.00 a barrel, with Nymex oil hitting $100.54 a barrel. The U.S. dollar index appreciated sharply and U.S. Treasury yields dropped. Bitcoin, seen by some as a safe-haven asset, once again sold off sharply when the going in the marketplace gets really tough.

So far, the West and NATO nations have not participated in defending Ukraine with their militaries. They say they have no plans to do so. However, in the fog of war major mistakes can be made by armies and their leaders. Much of the world is hoping the West and NATO do not get sucked into this conflagration.


Gold price is not reacting to war in Europe, here's the real reason it moved up - Alain Corbani

All of the above developments make the other worry in the marketplace even greater: rising inflation. That’s also bullish for the metals markets. The keen marketplace uncertainty and anxiety may well impact the timing of the Federal Reserve’s plans to raise U.S. interest rates. Falling U.S. Treasury yields and potential slowing global economic growth due to the Russia-Ukraine war, and sharply rising energy prices, risk the Fed and other central banks pushing their economies into recession if they raise interest rates too aggressively.

The key outside markets today see Nymex crude oil prices posting big gains and trading around $96.85 a barrel. The U.S. dollar index is sharply higher and hit a 1.5-year high today. The benchmark U.S. 10-year Treasury note is presently yielding 1.925%.

Live 24 hours gold chart [Kitco Inc.]

Technically, April gold futures prices have backed well off the 1.5-year high of $1,976.50 scored overnight. Bulls have the solid overall near-term technical advantage, but today’s low-range close suggests the bulls are tired and need to pause. Prices are in a steep uptrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at Thursday’s high of $1,976.50. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,875.00. First resistance is seen at $1,950.00 and then at $1,976.50. First support is seen at today’s low of $1,911.50 and then at $1,900.00. Wyckoff's Market Rating: 8.5

Live 24 hours silver chart [ Kitco Inc. ]

March silver futures prices hit a seven-month high today. The silver bulls have the overall near-term technical advantage but appear tired now. Prices are in an uptrend on the daily chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $26.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at $25.00 and then at today’s high of $25.67. Next support is seen at today’s low of $24.55 and then at $24.00. Wyckoff's Market Rating: 6.5.

March N.Y. copper closed down 100 points at 447.40 cents today. Prices closed nearer the session low today. The copper bulls have the overall near-term technical advantage. Prices are in a choppy, two-month-old uptrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the February high of 470.85 cents. The next downside price objective for the bears is closing prices below solid technical support at the January low of 428.20 cents. First resistance is seen at 454.55 cents and then at today’s high of 458.50. First support is seen at last week’s low of 444.40 cents and then at 440.00 cents. Wyckoff's Market Rating: 6.0.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.