Gold futures up as risk aversion remains elevated

(Kitco News, Thurs. Mar. 3rd, 2022) – Gold and silver prices are higher in early U.S. trading Thursday, on safe-haven demand as risk appetite remains squelched by the Russia-Ukraine geopolitical situation. April gold futures were last up $8.40 at $1,930.70 and May Comex silver was last up $0.26 at $25.44 an ounce.

Global stocks markets were mixed overnight, and the U.S. stock indexes are pointed toward weaker openings when the New York day session begins. Risk aversion remains elevated amid the Russia-Ukraine war that has intensified. Crude oil and grain prices are soaring and that’s also stoking inflation fears. In a stunning inflation report coming from the Euro zone, its January producer price index rose 30.6%, year-on-year, mostly due to rising energy prices.

Bloomberg in an email dispatch Thursday morning reported, “With traders continuing to avoid Russian oil supplies over sanctions uncertainty, OPEC-plus not hiking their scheduled quota increase Wednesday and Iran talks still not resolved, traders are paying the biggest premium in more than two years to bet on higher prices. Aluminum, nickel, zinc and wheat all continue to rise, putting the Bloomberg Commodity Spot Index on course for its biggest weekly gain since 1960.”

Fed Chairman Powell speaks again to U.S. lawmakers Thursday, after he on Wednesday signaled a 0.25% interest rate increase is coming in a couple weeks.

On Friday comes the February U.S. employment situation report from the Labor Department. The key non-farm payrolls number is seen coming in at up 440,000 after a gain of 467,000 in January.

The key outside markets today see Nymex crude oil prices posting more strong gains and trading around $114.00 a barrel after hitting an 13.5-year high of $116.57 overnight. The U.S. dollar index is higher again today. The benchmark U.S. 10-year Treasury note is presently yielding 1.854%.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, revised productivity and costs, the U.S. services PMI, the ISM report on business services, manufacturers’ shipments and inventories, monthly chain store sales and the global services PMI.

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 the overnight high of $1,941.40 and then at this week’s high of $1,952.60. First support is seen at today’s low of $1,923.10 and then at Wednesday’s low of $1,916.00.

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 $26.00 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 February high of $25.705 and then at $26.00. Next support is seen at the overnight low of $25.21 and then at $25.00.

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com