Gold and silver sell off when U.S. Treasury yield spikes above 1.5%
New York (Mar 4) Gold and silver prices are lower in midday U.S. trading Thursday. April gold futures are poised to close at a nine-month-low close today, while May silver futures hit a five-week low today. The metals markets turned south around midday during a speech by Fed Chairman Jerome Powell at a jobs summit. Powell said in his speech he does not see inflation becoming long-term problematic but it may see a short-term spike as the U.S. economy recovers from the pandemic later this year. Powell added that the recent rise in government bond yields is notable but also probably not a longer-term phenomenon. He also said the U.S. still faces a long road to full economic recovery. The 10-year U.S. Treasury note saw its yield quickly push above 1.5% right around Powell's comments, despite many analysts calling Powell's remarks overall dovish on U.S. monetary policy. April gold futures were last down $12.60 at $1,703.70 and May Comex silver was last down $0.482 at $25.90 an ounce.
Global stock markets were mostly lower overnight. U.S. stock indexes are lower at midday. Traders and investors will continue to keep a wary eye on government bond yields, which have been generally rising recently, and which have again made stock markets wobbly late this week. The U.S. Treasury 10-year note is presently trading around 1.541% for its yield.
Traders are also awaiting Friday morning's Employment Situation Report for February from the U.S. Labor Department—arguably the most important U.S. data point of the month. The key non-farm payrolls number is seen up 210,000 in February.
The key "outside markets" today see Nymex crude oil futures prices sharply higher, hitting a 13-month high and trading around $64.70 a barrel. An OPEC meeting that began Thursday saw its members reportedly not committing to any production increases, which boosted oil prices. Meantime, the U.S. dollar index is firmer early today.
Technically, April gold futures prices were poised to close at a nine-month low close today. The gold bears have the solid overall near-term technical advantage. Prices are in a two-month-old downtrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at this week's high of $1,757.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,650.00. First resistance is seen at today's high of $1,721.60 and then at $1,730.00. First support is seen at this week's low of $1,699.40 and then at $1,680.00. Wyckoff's Market Rating: 2.0
May silver prices hit a five-week low today. The silver bulls and bears are on a level overall near-term technical playing field. Silver bulls' next upside price objective is closing prices above solid technical resistance at $28.47 an ounce. The next downside price objective for the bears is closing prices below solid support at $25.00. First resistance is seen at today's high of $26.385 and then at $27.00. Next support is seen at today's low of $25.66 and then at $25.50. Wyckoff's Market Rating: 5.0.
May N.Y. copper closed down 1,265 points at 401.45 cents today. Prices closed nearer the session low today and saw heavy profit taking. The copper bulls still have the firm overall near-term technical advantage. Prices are in a 12-month-old uptrend on the daily bar chart. However, bulls do not want to see a bearish weekly low close on Friday that would be one clue that a market top is in place. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the February high of 437.55 cents. The next downside price objective for the bears is closing prices below solid technical support at 380.00 cents. First resistance is seen at 410.00 cents and then at today's high of 415.05 cents. First support is seen at today's low of 393.00 cents and then at 390.00 cents. Wyckoff's Market Rating: 7.0.
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