Price pressure on gold, silver amid rising U.S. bond yields
(Kitco News) - Gold and silver prices are weaker in early U.S. trading Thursday, as U.S. government bond yields continue to push higher due to a still-hawkish U.S. Federal Reserve. April gold was last down $8.20 at $1,833.30 and March silver was down $0.117 at $21.555.
Traders and investors have mostly digested the Federal Reserve's FOMC minutes that were released Wednesday afternoon. The marketplace deemed the minutes as leaning slightly more hawkish than expected, as there were a few FOMC members that wanted a 50-basis-point hike in the Fed fund range at the January meeting. That meeting saw a 25-basis-point rise.
A feature in the marketplace this week has been rising U.S. Treasury yields, with the benchmark U.S. 10-year note yield inching toward the 4.0% level. That suggests the marketplace is coming to grips with a U.S. Federal Reserve monetary policy that will keep interest rates “higher for longer” to successfully tamp down inflation.
Global stock markets were mixed but mostly firmer overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins.
In overnight news, the Euro zone January consumer price index was reported up 8.6%, year-on-year, which was right in line with market expectations.
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The key outside markets this morning see the U.S. dollar index slightly higher. Nymex crude oil futures prices are firmer and trading around $74.50 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.945%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the second estimate of fourth-quarter GDP, which includes the closely watched PCE price index, the weekly DOE liquid energy stocks report, and the Kansas City Fed manufacturing survey.
Technically, the gold futures bears have the slight overall near-term technical advantage. Prices are in a fledgling downtrend on the daily bar chart. Bulls' next upside price objective is to produce a close in April futures above solid resistance at last week's high of $1,881.60. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at this week's high of $1,856.40 and then at $1,870.90. First support is seen at the February low of $1,827.70 and then at $1,820.00. Wyckoff's Market Rating: 4.5.
The silver bears have the overall near-term technical advantage. Prices are in a downtrend on the daily bar chart. Silver bulls' next upside price objective is closing March futures prices above solid technical resistance at $22.635. The next downside price objective for the bears is closing prices below solid support at $20.00. First resistance is seen at this week's high of $22.00 and then at $22.25. Next support is seen at this week's low of $21.435 and then at the February low of $21.155. Wyckoff's Market Rating: 4.0.