(Kitco News) - Gold and silver prices are weaker near midday Thursday, weighed down by gains in the U.S. dollar index and by worries that global inflation will rise, which in turn could weaken global economies and diminish demand for the metals. Rising U.S. Treasury yields are also bearish for the gold and silver markets. The bullish element of safe-haven demand amid the Iran war and the associated keen risk aversion in the general marketplace is on this day being trumped by the aforementioned factors. April gold was last down $43.00 at $5,136.40. May silver prices were down $0.365 at $85.15.
Gold and silver traders have taken note that in what is arguably the biggest and potentially most destabilizing geopolitical event in decades, the war in Iran has not significantly moved the needle on the safe-haven gold and silver markets’ prices. When a market cannot rally on fresh, bullish fundamental news (like the Iran war for metals), then that’s a sign the bulls are exhausted and the major markets have run their course.
The key outside markets today see the U.S. dollar index higher, with Nymex crude oil prices solidly up and trading around $96.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.23 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 last week’s high of $5,434.10. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $5,000.00. First resistance is seen at $5,200.00 and then at this week’s high of $5,248.70. First support is seen at $5,100.00 and then at $5,000.00. Wyckoff's Market Rating: 7.0.
May silver futures bulls see their next upside price objective is closing prices above solid technical resistance at $95.86. The next downside price objective for the bears is closing prices below solid support at the February low of $71.815. First resistance is seen at this week’s high of $90.385 and then at $92.50. Next support is seen at today’s low of $84.06 and then at $82.50. Wyckoff's Market Rating: 6.0
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