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(Kitco News) - Gold prices are sharply lower, but up from stronger earlier losses, in midday U.S. trading Thursday. Silver prices are posting strong losses and at four-week lows. Despite keen risk aversion in the general marketplace, the safe-have metals are under solid selling pressure, most of which is profit-taking and weak long liquidation in the futures markets. June gold was last down $33.70 at $3,131.50. May silver prices were last down $2.635 at $32.05.
Today’s price action in gold is a classic “buy the rumor, sell the fact” scenario that many times plays out when a major fundamental event is expected to happen, with futures traders factoring in the expected event before it occurs. Then after the event does occur, traders take profits.
Worries about slowing global economic growth are on the rise today, after already being elevated, amid new U.S. tariff levies announced Wednesday afternoon. With the marketplace un-nerved at present, for many traders it’s a case of “if you can’t sell what you want, you sell what you can.” That’s likely in part what’s causing safe-haven gold and silver markets to sell off, despite the risk-off general marketplace.
U.S. stock indexes are sharply lower and at multi-month lows at midday.
Said David Morrison with Trade Nation today in an email dispatch: “Markets reacted violently overnight as President Trump imposed sweeping reciprocal tariffs. …The tariff announcement sent shockwaves through financial markets, with traders scrambling to assess the implications. Confusion and uncertainty now dominate sentiment as fears of a full-scale global trade war become a reality. Retaliatory measures from major economies are now widely expected, adding fuel to the fire.”
The Japanese yen and Swiss franc are seeing safe-haven buying today.
The key outside markets today see the U.S. dollar index sharply lower and at a six-month low. Nymex crude oil futures prices are also sharply down and trading around $66.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.05%. U.S. Treasuries are benefitting from flight-to-quality buying of U.S. debt amid the roiled marketplace.
The new U.S. tariffs matter has overshadowed Friday’s March U.S. employment report from the Labor Department. The key non-farm payrolls figure is seen coming in up 140,000 compared to a rise of 151,000 in the February report.
Technically, June gold futures bulls still have the solid overall near-term technical advantage. However, strong selling pressure to end the trading week on Friday would begin to suggest a near-term market top is in place. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $3,201.60. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,031.00. First resistance is seen at $3,150.00 and then at $3,177.00. First support is seen at today’s low of $3,073.50 and then at $3,050.00. Wyckoff's Market Rating: 8.0.
May silver futures bulls have lost their overall near-term technical advantage and are fading fast. A three-month-old uptrend on the daily bar chart has been negated. Silver bulls' next upside price objective is closing prices above solid technical resistance at $34.50. The next downside price objective for the bears is closing prices below solid support at the February low of $31.365. First resistance is seen at $32.50 and then at $33.00. Next support is seen at today’s low of $31.85 and then at $31.365. Wyckoff's Market Rating: 5.0.
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