Gold loses altitude, silver down sharply as USDX rallies, risk aversion somewhat abates
Gold prices are higher but down around $100 from the overnight highs, while silver prices lost overnight gains and are trading sharply down. A strong rally in the U.S. dollar index today, which hit a five-week high, is prompting some downside pressure on the precious metals. Profit taking from the shorter-term futures traders, as well as weak long liquidation, are featured today. Also, it appears the keen risk aversion in the general marketplace seen overnight and early today is somewhat abating near midday today. April gold was last up $65.00 at $5,311.50. March silver prices were down $4.877 at $87.645.
Money markets scaled back wagers on interest-rate cuts in the U.S., U.K. and Euro zone Monday as war in the Middle East sent oil prices spiking higher and fanned inflation fears. “The chance of the Federal Reserve reducing borrowing costs three times in 2026 has dropped to 20% from almost 50% last week, according to swaps tied to policy-meeting dates. Traders no longer expect the Bank of England to deliver three reductions this year and have lowered the probability of a cut in March to 60% from more than 80%. They have halved the odds of a European Central Bank rate cut this year, pricing just five basis points,” said a Bloomberg report. “U.S., U.K. and German two-year yields — which are among the most sensitive to changes in monetary policy — have risen more than longer maturities. That reflects a sharp jump in inflation gauges,” said the report.
The other key outside markets today see crude oil prices solidly higher, but well down from overnight highs, and hitting an eight-month high overnight, presently trading around $70.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.00 percent.
Note: The gold market operates through two primary pricing mechanisms. The first is the spot market, which quotes prices for on-the-spot purchase and immediate delivery. The second is the futures market, which sets prices for delivery at a future date. Due to year-end positioning market liquidity, the December gold futures contract is currently the most actively traded on the CME.
April gold futures bulls’ next upside price objective is to produce a close above solid resistance at the contract/record high of $5,626.80. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $5,000.00. First resistance is seen at the overnight high of $5,434.10 and then at $5,500.00. First support is seen at today’s low of $5,272.90 and then at $5,200.00. Wyckoff's Market Rating: 7.5.
March silver futures bulls see the next upside price objective is closing prices above solid technical resistance at $100.00. The next downside price objective for the bears is closing prices below solid support at the February low of $71.815. First resistance is seen at $90.00 and then at $92.50. Next support is seen at $85.00 and then at $82.50. Wyckoff's Market Rating: 6.5
