Gold, silver slump on strong U.S. dollar, rising bond yields

(Kitco News Wed. April 27th, 2022) – Gold and silver prices are lower in midday U.S. Trading Wednesday and hit two-month lows. The safe-haven metals are being hit hard by a surging U.S. dollar and rising government bond yields. The bulls also continue to get punished by the chart-based bears who continue to press their case amid weakening near-term technicals. June gold futures were last down $15.40 at $1,888.70 and May Comex silver was last down $0.049 at $23.485 an ounce.

A feature in the marketplace this week is the soaring value of the U.S. dollar, as the U.S. dollar index today hit another two-year high. Meantime, the Euro currency today hit a five-year low. The greenback is seeing safe-haven demand amid the geopolitical crisis. The Euro zone is getting hammered by soaring energy costs, as much of Europe gets its energy from Russia. Russia on Tuesday cut off natural gas supplies to Poland and Bulgaria.

Global stock markets were mixed overnight. U.S. stock indexes are higher at midday, on corrective bounces after big losses Tuesday. This week is the busiest U.S. corporate earnings week of the quarter, which will help drive stock prices. So far most of the earnings reports have been upbeat. However, at present geopolitics is trumping corporate earnings as risk aversion remains elevated amid the Russia-Ukraine war that is the biggest battlefield in Europe since World War Two. Inflation worries are also near the front burner of the marketplace.

Major Russian gold miner opts for exports versus imports as local banks buy gold at discount
The other key outside market sees Nymex crude oil futures prices weaker and trading around $100.75 a barrel. The yield on the 10-year U.S. Treasury note is presently fetching 2.8%.

Technically, June gold futures prices hit another two-month low today. A price downtrend line is in place on the daily bar chart. Bears have gained the slight overall near-term technical advantage and have momentum on their side. Bulls’ next upside price objective is to produce a close above solid resistance at $1,950.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,850.00. First resistance is seen at $1,900.00 and then at today’s high of $1,908.10. First support is seen at today’s low of $1,881.60 and then at $1,875.00.

May silver futures prices hit a nine-week low today. A price downtrend line is in place on the daily bar chart. The silver bears have the overall near-term technical advantage. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $25.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at today’s high of $23.765 and then at $24.00. Next support is seen at today’s low of $23.275 and then at $23.00. Wyckoff’s Market Rating: 3.5.

May N.Y. copper closed up 245 points at 446.50 cents today. Prices closed nearer the session high today and saw short covering. The copper bears have the overall near-term technical advantage. A price downtrend line is in place on the daily bar chart. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at 470.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the January low of 428.80 cents. First resistance is seen at 450.00 cents and then at Tuesday’s high of 452.45 cents. First support is seen at this week’s low of 438.30 cents and then at 430.00 cents.

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com