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(Wallace Refiners) – Gold and silver prices are are lower again in early U.S. trading Friday, pressured by rising bond yields, a higher U.S. dollar index and lower crude oil prices on this day. Some “Fedspeak” on Thursday afternoon reminded the marketplace just how hawkish the U.S. central bank has become the past few months. June gold futures were last down $14.40 at $1,933.60 and May Comex silver was last down $0.301 at $24.33 an ounce.
Risk appetite remains tepid at best late this week. Traders Thursday afternoon got another dose of hawkish U.S. monetary policy rhetoric from Fed Chairman Jerome Powell, suggesting the Fed is on an aggressive tightening path in order to put the brakes on problematic price inflation. U.S. Treasury yields surged and stocks slid after Powell in a speech at an IMF/World Bank meeting on Thursday afternoon reiterated a bias for strong U.S. interest rate hikes in the coming months. Traders and investors are now expecting 50 basis-point increases at the FOMC meetings in May, June and maybe July. Powell detailed his most aggressive approach to taming inflation to date. Meantime, markets are factoring in 25 basis-point rises in European Central bank interest rates in both July and September. A Barron’s headline today reads: “Powell the hawk may send stocks further south.”
Nymex crude oil futures prices are lower today and trading around $102.25 a barrel. The U.S. dollar index is higher early today. The yield on the 10-year U.S. Treasury note is presently fetching 2.945%.
U.S. economic data due for release Friday includes the U.S. flash services and manufacturing purchasing managers indexes. More IMF and World Bank meetings are taking place in Washington, D.C.
Technically, the June gold futures bulls have the overall near-term technical advantage but have faded this week. Bulls’ next upside price objective is to produce a close in April futures above major resistance at $2,000.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at $1,950.00 and then at $1,960.00. First support is seen at the overnight low of $1,931.80 and then at $1,915.00. Wyckoff’s Market Rating: 6.5
May silver futures bulls have lost their slight overall near-term technical advantage and are fading. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $25.50 an ounce. The next downside price objective for the bears is closing prices below solid support at $24.00. First resistance is seen at the overnight high of $24.74 and then at $25.00. Next support is seen at today’s low of $24.08 and then at $24.00. Wyckoff’s Market Rating: 5.0.
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