(Kitco News) - Gold and silver prices are posting sharp losses near midday Thursday. The late-morning price downdrafts were quick to occur, with platinum, palladium, copper, the U.S. stock indexes and crude oil prices all dropping to their daily price lows at the same time. Meantime, U.S. Treasuries prices hit their daily highs at the same time. No apparent reason for these moves had surfaced as of this writing. It could be that a major investment bank or hedge fund decided to unload big long positions in one or more of the aforementioned markets that saw heavy selling pressure—to create somewhat of a “flash crash” across several markets. Gold had moved up a bit off its daily low near midday, but silver continued its descent to new daily lows. April gold was last down $120.00 at $4,980.00. March silver prices were down $7.75 at $76.20.
It could be that some position evening ahead of Friday morning’s January U.S. consumer price index report prompted some of the selling. There was also a rumor swirling about that the CPI print had been leaked today and that it was a “hot” number, inflation-wise. That rumor is so far unfounded. Analysts are expecting a January CPI number of up 2.5%, year-on-year, with the “core” reading (minus food and energy) also seen up 2.5% yoy. The December CPI annual reading was up 2.5%, while the December core annual reading was up 2.6%.
The key outside markets today see the U.S. dollar modestly up, with crude oil prices a lower and trading around $62.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.1 percent.
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 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 last week’s low of $4,670.00. First resistance is seen at this week’s high of $5,144.50 and then at $5,200.00. First support is seen at today’s low of $4,900.00 and then at $4,800.00. Wyckoff's Market Rating: 6.5.
March silver futures bulls see their next upside price objective is closing prices above solid technical resistance at $90.00. The next downside price objective for the bears is closing prices below solid support at the February low of $63.90. First resistance is seen at $80.00 and then at today’s high of $84.875. Next support is seen at $74.00 and then at $72.50. Wyckoff's Market Rating: 5.0.
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