Corrective price pullbacks for gold, silver at mid-week

(Kitco News, Wed. Mar. 2nd, 2022) – Gold and silver prices are weaker in early U.S. trading Wednesday, on routine downside corrections after recent gains. The Russia-Ukraine geopolitical situation will keep the precious metals prices elevated. April gold futures were last down $13.10 at $1,930.50 and May Comex silver was last down $0.306 at $25.24 an ounce.

Global stocks markets were mixed to firmer overnight and the U.S. stock indexes are pointed toward higher openings when the New York day session begins. The week-old Russian invasion of Ukraine continues and no off ramp for the conflict is in sight. In fact, some military experts are saying the Russia-Ukraine war could last 10 years.

President Biden’s state-of-the-union address Tuesday night saw no surprises, as he discussed the Russia-Ukraine war, problematic price inflation and other domestic matters.

In overnight news, Eurozone inflation hit a record high as the bloc’s February consumer price index rose at a 5.8% rate, year-on-year, following a 5.1% rise in January.

The marketplace awaits Federal Reserve Chairman Jerome Powell’s testimony today to a U.S. House panel. Many market watchers think the geopolitical crisis will alter the timing and degree of the Fed’s expected interest rate increases this year. Powell could shed more light on that notion in his remarks today.

The key outside markets today see Nymex crude oil prices posting strong gains and trading around $108.50 a barrel and hitting an 8.5-year high of $111.50 overnight. An important OPEC meeting is occurring today, which is expected to see the cartel slightly raise its collective crude oil production. The U.S. dollar index is higher again today and hit a 1.5-year high. The benchmark U.S. 10-year Treasury note is presently yielding 1.732%. T-Note yields have been falling the past week, on flight-to-quality buying of U.S. debt.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, the Federal Reserve’s beige book and the weekly DOE liquid energy stocks report.

Technically, the April gold futures bulls have the solid overall near-term technical advantage. Prices are in a five-week-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in April futures above major resistance at the February high of $1,976.50. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,882.50. First resistance is seen at this week’s high of $1,952.60 and then at $1,976.50. First support is seen at today’s low of $1,916.00 and then at $1,900.00.

May silver futures bulls have the overall near-term technical advantage. Prices are in a four-week-old uptrend on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the February high of $25.705 an ounce. The next downside price objective for the bears is closing prices below solid support at $23.50. First resistance is seen at the overnight high of $25.545 and then at $25.705. Next support is seen at the overnight low of $24.96 and then at $24.50.

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com