(Kitco News) - Gold is slightly up and silver prices are higher near midday Wednesday, but both metals are way down from overnight solid gains. Profit-taking pressure from the shorter-term futures traders is featured. A rebound in the U.S. dollar index is also a negative outside-market element for the precious metals. April gold was last up $14.30 at $4,947.00. March silver prices were up $3.314 at $86.57.
Also worrisome for gold bulls, Bloomberg reported China’s major gold-backed exchange-traded funds recorded their biggest ever daily outflows Tuesday – nearly $1 billion combined – with investor confidence rattled by the metal’s abrupt pullback from an all-time high. Mainland China’s four largest bullion-backed ETFs saw total net outflows of about 6.8 billion yuan ($980 million) on Tuesday, according to data compiled by Bloomberg. That marked a second straight day of declines for the Huaan Yifu, Bosera, E Fund and Guotai ETFs, just days after they notched record inflows last week.
The key outside markets today see the U.S. dollar index higher, while crude oil prices are slightly down and trading around $63.25 a barrel. The yield on the 10-year U.S. Treasury note is presently 4.28%.
Note: The gold market operates through two primary pricing mechanisms. The first is the spot market, which quotes prices for on-the-spot purchase and immediate delivery. The second is the futures market, which sets prices for delivery at a future date. Due to year-end positioning market liquidity, the December gold futures contract is currently the most actively traded on the CME.
Technically, April gold futures last week has formed a big and bearish “key reversal” down on the daily bar chart, which is one chart clue that a market top is in place. Bulls’ next upside price objective is to produce a close above solid resistance at $5,250.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at this week’s low of $4,423.20. First resistance is seen at $5,000.00 and then at the overnight high of $5,113.90. First support is seen at $4,900.00 and then at $4,800.00. Wyckoff's Market Rating: 6.5.
March silver futures see a bearish pennant pattern possibly forming on the daily bar chart. The next upside price objective is closing prices above solid technical resistance at $100.00. The next downside price objective for the bears is closing prices below solid support at $70.00. First resistance is seen at $90.00 and then at $92.50. Next support is seen at $85.00 and then at the overnight low of $83.00. Wyckoff's Market Rating: 5.5.
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