Safe-haven demand powers gold price sharply up
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(Kitco News) - Gold and silver prices are sharply up and gold hit a four-week high in early U.S. trading Monday, on safe-haven demand amid a very uneasy general marketplace. April gold was last up $25.70 at $1,892.70 and May silver was up $0.669 at $21.18.
Trader and investor anxiety is elevated to start the trading week, following a turbulent weekend in the wake of late last week’s collapse of Silicon Valley Bank, the sixteenth largest bank in the U.S. The federal government said it would back all depositors in the failed bank. Other smaller U.S. banks are reported to be in stress due to depositor withdrawals. Government regulators have also taken over Signature Bank, which serves many crypto currency companies.
To show how much this event has shaken the general marketplace, Goldman Sachs is now predicting the Federal Reserve will not raise U.S. interest rates at its FOMC meeting next week. Said one market analyst in a Wall Street Journal story today: “When the Fed raises rates so quickly, nine times out of 10, it breaks things. We may see more corporate failures; we may see more regional banks go under.” Read a headline on Dow Jones Newswires: “Bank mayhem is now on the Fed’s radar.”
Global stock markets were mostly lower overnight, while U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins.
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U.S. Treasury prices are also solidly up (yields down) on flight-to-quality buying. Meantime, Bitcoin prices are sharply up.
Of course, the fear in the marketplace is a contagion effect and crisis of confidence among the investing public and the general public. The next two days will be critical in gauging the stress of the investing and general public.
The key outside markets today see the U.S. dollar index lower after hitting a three-month high last week. Nymex crude oil futures prices are lower and trading around $75.25 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.549%, after recently poking above the 4.0% level.
Technically, the gold futures bulls have the firm overall near-term technical advantage. Bulls' next upside price objective is to produce a close in April futures above solid resistance at the February high of $1,975.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the February low of $1,810.80. First resistance is seen at $1,900.00 and then at $1,915.00. First support is seen at the overnight low of $1,875.70 and then at $1,864.40. Wyckoff's Market Rating: 7.0
The silver bears have the overall near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. Silver bulls' next upside price objective is closing May futures prices above solid technical resistance at $22.00. The next downside price objective for the bears is closing prices below solid support at the March low of $19.945. First resistance is seen at $21.39 and then at $21.80. Next support is seen at the overnight low of $20.645 and then at $20.505. Wyckoff's Market Rating: 3.5.