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Price declines in gold, silver as USDX, Treasury yields on the rise

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(Kitco News) - Gold and silver prices are lower in early U.S. trading Monday, pressured by a U.S. dollar index that is solidly higher and trading near a 20-year high, and by rising U.S. Treasury yields that are at multi-year highs. Gold prices did hit a five-week high overnight but those gains could not be held. August gold futures were last down $18.60 at $1,857.30. July Comex silver futures were last down $0.346 at $21.595 an ounce.

Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward sharply lower openings and new for-the-move lows when the New York day session begins. The Russia-Ukraine war and its economic implications, and problematic price inflation are weighing heavily on trader and investor sentiment to start the trading week. Add to that mix Covid lockdowns on the rise in China, the world’s second-largest economy and a major supplier of products around the globe. Don’t be surprised to see gold and silver bulls buy this dip amid the keener anxiety in the marketplace early this week.

The key outside markets today see Nymex crude oil prices solidly lower and trading around $118.50 a barrel. The U.S. dollar index is solidly higher in early trading and hit a 20-year high overnight. The yield on the 10-year U.S. Treasury note is fetching 3.23%--the highest level in 14 years.  

Crypto currencies are under strong selling pressure again to start the trading week.

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The data point of the week is the Federal Reserve’s FOMC meeting that begins on Tuesday morning and ends Wednesday afternoon with a statement. The Fed is expected to raise U.S. interest rates by at least 0.5%. Fed Chairman Jerome Powell will hold a press conference after the FOMC meeting concludes Wednesday afternoon.

Also to be monitored closely will be Tuesday’s U.S. producer price index report for May, which is seen up 0.8% from April and compares to April’s reading of up 0.5% from March.

There is no major U.S. economic data due for release Monday includes

Live 24 hours gold chart [Kitco Inc.]

Technically, the August gold futures bears have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at the June high of $1,878.60. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at $1,878.60 and then at the overnight high of $1,882.50. First support is seen at $1,850.00 and then at $1,835.00. Wyckoff's Market Rating: 3.5

Live 24 hours silver chart [ Kitco Inc. ]

July silver futures bears have the firm overall near-term technical advantage. A a price uptrend on the daily chart has been negated. Silver bulls' next upside price objective is closing prices above solid technical resistance at $23.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the May low of $20.42. First resistance is seen at $22.00 and then at $22.25. Next support is seen at last week’s low of $21.235 and then at $21.00. Wyckoff's Market Rating: 2.5.

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.