Gold a bit weaker on price pause; bulls remain confident

(Kitco News, Wed. April 17th, 2024) – Gold prices are modestly lower and silver prices a bit higher in early U.S. trading Wednesday. Both markets are in a pause mode as tentative traders investors ponder the next shoe to drop in the volatile Middle East. June gold was last down $4.10 at $2,403.70. May silver was last up $0.194 at $28.57.

Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed to toward firmer openings when the New York day session begins.

Federal Reserve Chairman Jerome Powell in remarks on Tuesday afternoon cast a hawkish tone on U.S. monetary policy. He said U.S. inflation persists, calling into question whether the Fed can cut interest rates this year. He suggested interest rates may have to remain higher for longer, to get inflation back down to a level where the Fed feels more comfortable. U.S. Treasury yields rose to five-month highs after Powell’s comments.

Powell’s hawkish lean is a bearish element for the precious metals markets. However, at present, heightened geopolitics are trumping economic fundamentals. Risk aversion remains elevated at mid-week, after the weekend air attack on Israel by Iran and its proxies. Israel has vowed to retaliate.

In overnight news, the Euro zone consumer price index for March came in at up 2.4%, year-on-year, which was in line with market expectations.

In other news, broker SP Angel reported overnight that metals analysts say central banks are buying around 25% of annual gold production–the highest level since the early 1970s when the Bretton Woods accord unraveled.

The key outside markets today see the U.S. dollar index slightly lower on a corrective pullback after hitting a 5.5-month high on Tuesday. Nymex crude oil prices are weaker and trading around $84.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching 4.65%.

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

Technically, the gold futures bulls have the strong overall near-term technical advantage. A two-month-old uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $2,500.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical

support at $2,300.00. First resistance is seen at this week’s high of $2,414.80 and then at $2,425.00. First support is seen at the overnight low of $2,389.00 and then at Tuesday’s low of $2,379.20.

The silver bulls have the strong overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Silver bulls’ next upside price objective is closing May futures prices above solid technical resistance at $30.00. The next downside price objective for the bears is closing prices below solid support at $26.00. First resistance is seen at this week’s high of $29.10 and then at $29.50. Next support is seen at $28.00 and then at this week’s low of $27.665.

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com