Gold, Silver Weaker on Rising Bond Yields, Bounce in Greenback

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Silver Price & PGMs

Apr 29, 2021 12:53 NY TimeKitco 10AM Silver Fix

(Kitco News) – Gold and silver prices are lower in midday U.S. trading Thursday, but up from their daily lows. The metals are pressured by U.S. Treasury yields that are on the rise again, and by a slight rebound in the U.S. dollar index today. The near-term technical postures for both metals have deteriorated this week, as price uptrends on the daily charts have been negated, which is also inviting some technical selling by the shorter-term futures traders. June gold futures were last down $6.70 at $1,767.20 and July Comex silver was last down $0.098 at $26.02 an ounce. 

Today’s report on first-quarter U.S. gross domestic product report showed a rise of 6.4% compared to market expectations for a rise of 6.5% from the fourth quarter. Meantime, the weekly U.S. jobless claims report showed 553,000 new claims, compared to expectations of 528,000 in new claims. Markets showed little reaction to these reports that came in close to market expectations.

Global stock markets were mostly up overnight. U.S. stock indexes are weaker at midday but no0t far below their record highs. The marketplace is upbeat late this week after Wednesday’s conclusion of the FOMC meeting that saw the U.S. central bank keep its monetary policy very accommodative, and also after President Biden’s Wednesday evening address to Congress, in which he laid out plans for a massive $1.8 trillion economic stimulus program. “In this environment it is very difficult to be bearish,” said one stock market analyst. Federal Reserve Chairman Jerome Powell on Wednesday afternoon dismissed the notion of price inflation getting out of control, saying presently rising inflation levels are due to “transitory factors.”

Commodity market watchers may beg to differ with the Fed’s notion that accelerating inflation is just a temporary matter. Several markets this week, including grains, lumber, copper and coffee prices this week hit multi-year highs. Lumber prices have skyrocketed to record highs. The “reflation trade” has yet to significantly boost gold and silver prices, however, as traders are apparently assigning more market weight to those metals’ safe-haven status amid little risk aversion in the marketplace, as opposed to viewing the metals as a hard-asset hedge against inflation.

The key outside markets today see the U.S. dollar index a bit firmer. Nymex crude oil prices are higher, hit a six-week high overnight and are trading around $64.75 a barrel. Meantime, the yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.656%.   

U.S. economic data due for release Thursday includes the weekly jobless claims report, the first-quarter GDP report, and pending home sales.

Technically, June gold futures prices scored a bearish “outside day” down on the daily bar chart today. The gold bulls have lost their overall near-term technical advantage as a four-week-old uptrend on the daily bar chart has been negated. Bulls’ next upside price objective is to produce a close above solid resistance at $1,800.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,723.20. First resistance is seen at $1,775.00 and then at today’s high of $1,789.90. First support is seen at today’s low of $1,754.60 and then at $1,750.00.

July silver futures prices scored a bearish “outside day” down today. The silver bulls have lost their overall near-term technical advantage. A four-week-old uptrend on the daily bar chart has been negated. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $27.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $25.00. First resistance is seen at today’s high of $26.58 and then at the April high of $26.765. Next support is seen at today’s low of $25.745 and then at $25.50. Wyckoff’s Market Rating: 5.0. 

July N.Y. copper closed down 185 points at 447.80 cents today. Prices closed nearer the session low today on mild profit taking after hitting a contract and nearly 10-year high early on today. The copper bulls have the strong overall near-term technical advantage. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at 460.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 420.00 cents. First resistance is seen at today’s contract high of 455.10 cents and then at 460.00 cents. First support is seen at Wednesday’s low of 441.55 and then at 440.00 cents.

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com