Price pressure on gold, silver as bond yields on the rise again

(Kitco News, Wed. May 18th, 2022) – Gold and silver prices are weaker in early U.S. trading Wednesday, due in part to U.S. Treasury yields that are on the rise again and a rebound in the U.S. dollar index at mid-week. June gold futures were last down $11.30 at $1,807.80. July Comex silver futures were last down $0.13 at $21.62 an ounce.

Global stock markets were mixed overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins, on corrective pullbacks following gains on Tuesday. Traders and investors remain tentative at mid-week on new reports that Covid continues to spread in China, after reports earlier this week that said China’s government could ease up on its lockdowns.

Federal Reserve Chairman Jerome Powell on Tuesday afternoon reiterated the central bank’s main goal is to tamp down inflation, even if it means pushing up the unemployment rate. He said the Fed “has the tools and resolve” to cool inflation. The marketplace read his latest comments as maybe not surprising but certainly hawkish.

In overnight news, U.K. inflation hit a 40-year high as consumer prices in April rose 9%, year-on-year. Euro zone inflation was also reported Wednesday and its consumer price index for April was up 7.4% on an annual basis.

WPIC sees platinum surplus falling to 627K in 2022, down from 1.2 million in 2021

The key outside markets today see Nymex crude oil futures prices firmer and trading around $114.00 a barrel. Meantime, the U.S. dollar index is firmer in early trading. The yield on the 10-year U.S. Treasury note is fetching 2.975%.

U.S. economic data due for release day Wednesday includes the weekly MBA mortgage applications survey, new residential construction and the weekly DOE liquid energy stocks report.

Technically, the June gold futures bears still have the firm overall near-term technical advantage. A nine-week-old downtrend 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 $1,875.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,750.00. First resistance is seen at the overnight high of $1,818.70 and then at this week’s high of $1,834.80. First support is seen at $1,800.00 and then at this week’s low of $1,785.00.

July silver futures bears have the solid overall near-term technical advantage. Prices are still in a downtrend on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $23.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the May low of $20.42. First resistance is seen at $22.00 and then at $22.50. Next support is seen at the overnight low of $21.475 and then at $21.00.

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com