Price pressure on gold, silver amid steep losses in crude oil
(Kitco News) - Gold and silver prices are lower in early U.S. trading Monday, feeling the pinch of raw commodity sector leader, crude oil, suffering strong price losses to start the trading week. Rising bond yields are also weighing on the safe-haven metals. April gold futures were last down $12.50 at $1,941.70 and May Comex silver was last down $0.31 at $25.30 an ounce.
Global stocks markets were mixed overnight. The U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. The Russia-Ukraine war continues to sap trader and investor confidence, with rising inflation doing the same. The marketplace is now factoring in a more aggressive pace for the Federal Reserve to raise U.S. interest rates, including 50 basis points at the May FOMC meeting, and maybe the same at the meeting after that.
Also worrisome to the marketplace is China placing its major city of Shanghai in a major Covid rolling lockdown. Reports said Tesla has halted production in its factory at Shanghai. Crude oil prices dropped in part on the news.
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The key outside markets see Nymex crude oil prices sharply lower and trading around $109.00 a barrel. The U.S. dollar index is higher early today. The benchmark U.S. 10-year Treasury note is presently yielding 2.51%--the highest in almost three years. Parts of the yield curve have now inverted, which is also suggesting weakening U.S. economic growth.
U.S. economic data due for release Monday includes the advance economic indicators report and the Texas manufacturing outlook survey.
Technically, the April gold futures bulls have the firm overall near-term technical advantage and are having a good week. Bulls’ next upside price objective is to produce a close in April futures above major resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the March low of $1,895.20. First resistance is seen at $1,950.00 and then at last week’s high of $1,967.20. First support is seen at the overnight low of $1,924.50 and then at last week’s low of $1,909.80. Wyckoff's Market Rating: 7.0
May silver futures bulls have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $26.50 an ounce. The next downside price objective for the bears is closing prices below solid support at $24.00. First resistance is seen at $25.50 and then at the overnight high of $25.795. Next support is seen at $25.00 and then at last week’s low of $24.695. Wyckoff's Market Rating: 6.5.