Price pressures on Gold, Silver amid sharp losses in Crude Oil
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(Kitco News) – Gold and silver prices are lower in early US trade Monday, feeling the pinch of commodity sector leader Crude Oil, which has suffered sharp price falls at the start of the trading week. Rising bond yields are also weighing on safe-haven metals. April gold futures were last down $12.50 to $1,941.70 and May Comex silver were last down $0.31 to $25.30 an ounce.
Global equity markets were mixed overnight. US stock indices are pointing to tightly mixed opens early in the New York session. The war between Russia and Ukraine continues to sap trade and investor confidence, and soaring inflation is doing the same. The market is now factoring in a more aggressive pace for the Federal Reserve to hike US rates, including 50 basis points at the May FOMC meeting and perhaps the meeting thereafter.
Also of concern for the market is that China is placing its major city of Shanghai in a major Covid-rolling lockdown. Tesla has reportedly halted production at its Shanghai factory. Crude oil prices fell partly on the news.
Major outside markets are seeing Nymex crude prices significantly lower, trading around $109.00 a barrel. The US dollar index is higher this morning. The benchmark 10-year US Treasury note is currently yielding 2.51% – its highest in almost three years. Parts of the yield curve have now inverted, which also points to a slowdown in US economic growth.
US economic data, due to be released on Monday, includes the economic indicators report and the Texas Manufacturing Outlook Survey.
Technically, April gold futures bulls have the firm short-term overall technical advantage and are having a good week. The bulls’ next upside target is to find a close above the main resistance at $2,000.00 in April. Bears’ next short-term downside target is to push futures prices below solid technical support at the March low of $1,895.20. Initial resistance is seen at $1,950.00 and then last week’s high of $1,967.20. Initial support is seen at the overnight low of $1,924.50 and then last week’s low of $1,909.80. Wyckoff’s market rating: 7.0
May silver futures bulls have the overall short-term technical advantage. The silver bulls’ next upside target is to close above solid technical resistance at $26.50 an ounce. The next downside target for the bears is a close below the solid support at $24.00. Initial resistance is seen at $25.50 and then overnight high of $25.795. Next support is seen at $25.00 and then last week’s low of $24.695. Wyckoff’s market rating: 6.5.
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