Sharp price declines in gold, silver amid up-tick in risk sentiment
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(Kitco News) - Gold and silver prices are posting strong losses and hit five-week lows in early U.S. trading Tuesday, pressured by an increase in trader and investor risk appetite early this week. Profit taking and weak long liquidation by the shorter-term futures traders is also featured in both metals. Lower crude oil prices and rising bond yields are also weighing on the safe-haven metals. April gold futures were last down $50.10 at $1,889.60 and May Comex silver was last down $1.071 at $24.11 an ounce.
Global stocks markets were mostly higher overnight. The U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Risk appetite has up-ticked Tuesday as Russia and Ukraine are holding more ceasefire talks. One Russian official termed the talks as being more constructive. Also, the grind of that war and no major new developments recently have somewhat numbed the marketplace. Limiting trader and investor enthusiasm, especially in the raw commodity sector (including gold and silver), is Covid cases that are on the rise in China, including China placing its largest city of Shanghai in a major rolling lockdown. It seems the pandemic just cannot be tamped down for long.
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The key outside markets see Nymex crude oil prices solidly lower and trading around $101.00 a barrel. An OPEC meeting is scheduled for Thursday to discuss cartel production levels from May forward. The U.S. dollar index is solidly lower early today. The benchmark U.S. 10-year Treasury note is presently yielding 2.42%.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store retail reports, the monthly house price index, the consumer confidence index and the S&P Core-Logic home price indexes.
Technically, the April gold futures bulls have the overall near-term technical advantage but are fading this week. Bulls’ next upside price objective is to produce a close in April futures above major resistance at last week’s high of $1,967.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,850.00. First resistance is seen at $1,900.00 and then at $1,915.00. First support is seen at today’s low of $1,888.30 and then at $1,882.50. Wyckoff's Market Rating: 6.0
May silver futures bulls have lost their overall near-term technical advantage and are fading fast early this week. Silver bulls' next upside price objective is closing prices above solid technical resistance at last week’s high of $26.16 an ounce. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at $24.55 and then at $25.00. Next support is seen at $24.00 and then at $23.75. Wyckoff's Market Rating: 5.0.