Sharp price declines in gold and silver amid firmer USDX, increasing bond yields

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(Kitco News) – Gold and silver futures prices are drastically lower and close to their session lows at the beginning of Wednesday’s US session. Rising government bond yields and a mid-week US dollar index rebound are negative external forces working against the precious metals markets. In addition, buying interest in safe-haven metals has recently been limited by a recovery in the stock markets and a recovery in the US dollar index. And then there are futures traders based on short-term charts that are piling up because of the more pessimistic short-term technical stances in gold and silver. April gold futures fell $ 24.10 to $ 1,710.00 and May Comex silver fell $ 0.649 to $ 26.225 an ounce.

The data point of the day in the US is the newly released ADP national employment report for February, which increased by 117,000, which was a major disadvantage compared to the expected increase of 225,000 jobs, and compares to a gain 174,000 in January. The metal markets sold even more after the data, although they should have supported prices. This report is a precursor to the US Department of Labor’s Friday morning employment status report – arguably the most important economic report of the month in the United States.

Global stock markets rose mainly overnight. US stock indexes point to higher openings when the New York Day session begins. Market attitudes are optimistic in the middle of the week, after President Biden said on Tuesday that all Americans who want a Covid vaccine should be able to get it by the end of May. In addition, the US government is approaching to launch its newest $ 1.9 trillion pandemic assistance package. “We can see the light at the end of the pandemic tunnel,” said a market analyst. Safe-harbor metals are not receiving support from the notions above.

In the evening news, the euro zone service purchasing managers’ index (PMI) in February stood at 45.7 compared to 45.4 in January. A reading below 50.0 suggests a retraction in the sector.

Traders and investors are still eyeing government bond yields, which have generally been rising recently and which sometimes make the stock markets a little unstable. The 10-year US Treasury bill is currently trading around 1.446% for its yield. Many veteran market analysts believe that US Treasury yields will continue to rise in the coming months.

The main “foreign markets” today see Nymex oil futures prices higher and trading at around $ 61.85 a barrel. There is an OPEC meeting on Thursday that the market will monitor closely. It could be that with the price of oil above $ 60 a barrel, the cartel opens the oil taps a little more, after containing production in recent months to sustain prices. The US dollar index is a little firmer today.

US economic data due for release on Wednesday include the weekly MBA mortgage order search, the ADP national employment report, the US service purchasing managers’ index (PMI), the ISM report on business services, the global services PMI, the Federal Reserve’s beige book and the DOE’s weekly net energy inventory report.

Technically, gold futures in April have a solid general short-term technical advantage amid a two-month price downtrend on the daily chart. The Bulls’ next bullish price target is to produce a close on the April futures above the solid resistance at this week’s high of $ 1,757.40. The bears’ next short-term low price objective is to push future prices below solid technical support to $ 1,700.00. The first resistance is seen at $ 1,725.00 and then at today’s high at $ 1,739.10. The first support is seen at this week’s low at $ 1,704.60 and then at $ 1,700.00. Wyckoff market rating: 2.5

Silver futures bulls may have a slight general short-term technical advantage, but they need to show new power soon to maintain it. The next bull bull price target is to close prices above solid technical resistance at last week’s high of $ 28.47 an ounce. The bears’ next downside price target is closing prices below solid support at $ 25.00. The first resistance is seen at the $ 26.915 night high and then at this week’s $ 27.175 high. The next support is seen at $ 26.00 and then at this week’s low of $ 25.82. Wyckoff market rating: 5.5.