Price pressure on gold, silver as government bond yields, USDX rise

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(Kitco News) – Gold and silver prices are significantly lower at the start of trading in the US on Friday. Gold prices hit another nearly 2.5-year low. Soaring government bond yields and a very strong US dollar index are bearish elements that are currently punishing the precious metals markets. October gold fell $ 24.80 to $ 1,646.50 and December silver fell $ 0.532 to $ 19.08.

Global equity markets were mostly bearish overnight. US stock indices are pointing to a significantly lower open and three-month lows when the New York day session begins. Risk aversion remains strong later this week after Russian President Putin earlier this week said he would mobilize more troops to fight his war with Ukraine and also implied he could use his nuclear weapons. if the integrity of Russia were threatened. Many experts claim that Putin was cornered and became an even more dangerous man.

Don’t be surprised if gold prices make a solid rebound by the end of today, heading for an uncertain weekend that sees global markets in turmoil and a Russian president the world sees as losing a war with a small country. Gold has a recent history of showing good strength when the market gets really tough.

Concerns about the recession in the US and / or the world have increased this week, following the negative comments on the US economic outlook by Federal Reserve Chairman Jerome Powell on Wednesday and as major central banks this week tightened their monetary policies to repress rising inflation. In the nightly news, the UK announced a major tax cut and deficit spending to try to get its economy up and running. That news helped boost global government bond yields. Meanwhile, euro zone manufacturing and service purchasing managers’ indices fell in September and suggest that both sectors are contracting.

Major external markets today see Nymex crude prices plunging sharply, hitting a seven-month low and trading around $ 80.50 a barrel. The US dollar index is significantly higher and pushed to another 20-year high at the start of US trading. A headline from Barron this morning reads: “The Dollar Is Crushing Its Rival Currencies.” It is important to point out that price developments in currency markets tend to be stronger and more lasting than price developments in other markets. Therefore, the greenback’s rally may continue for some time. Meanwhile, the 10-year US Treasury bond yield is on the rise and currently reaches 3.771% and reaches an 11-year high. The 2-year Treasury bond yield is 4.205%.

US economic data scheduled for release on Friday includes US flash production and service purchasing managers indices.

Technically, the October gold futures bears have the solid overall technical advantage in the short term. Prices are in a downtrend on the daily bar chart. The bulls’ next bullish price target is to produce a close above the solid resistance at $ 1,700.00. Bears’ next short-term bearish price target is pushing futures prices below solid technical support at $ 1,600.00. The first resistance was seen at the overnight high of $ 1,674.50 and then this week’s high of $ 1,687.00. First support is seen at today’s low of $ 1,638.80 and then at $ 1,625.00. Wyckoff’s Market Valuation: 1.0

24 hour real time silver chart [ Kitco Inc. ]

The bears on September silver futures have the overall short-term technical advantage. The next upside target for the silver bulls is to close the price above the solid technical resistance at $ 20.00. The next bearish price target for the bears is to close the price below the solid support at $ 18.00. The first resistance was seen at the overnight high of $ 19,745 and then at $ 20.00. Next support is at $ 19.00 and then $ 18.77. Wyckoff’s market valuation: 2.5.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. It is not a solicitation to trade in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article disclaim any liability for loss and / or damage resulting from the use of this publication.


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