Gold, silver bears appear to have run out of gas
In a major whip-saw trading session for many markets, gold prices are lower but well up from daily lows that saw gold hit a four-month bottom overnight. Silver prices have rallied off their 3.5-month low and are trading higher near midday. Technicals suggest the gold and silver market bears are now exhausted. (See technical analysis below.) The surprise news from President Trump early this morning that the Iran war may be de-escalating roiled the marketplace with big price gyrations in many markets, including gold and silver. Crude oil prices fell by around 10% today. The metals markets are seeing continued underlying selling pressure amid global inflation worries. April gold was last down $103.40 at $4,468.00. May silver prices were up $0.841 at $70.46.
President Trump today said he ordered the Pentagon to postpone military strikes against Iranian power plants and energy infrastructure for a five-day period, according to a Truth Social post. U.S. and Iran have had very good and productive conversations over the past two days, he said. However, Iran news agency reportedly denies Trump’s progress claims. Global stock markets rebounded and bond prices rallied on Trump social media post.
The key outside markets today see the U.S. dollar index lower. Crude oil prices are sharply down and trading around $86.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.3 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.
Technically, the gold market bears appear exhausted, as evidenced by today big selling “exhaustion tail,” whereby gold prices piked lower and then rebounded to finish nearer daily highs—suggesting the bears have run out of gas. April gold futures bulls’ next upside price objective is to produce a close above solid resistance at $4,750.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at today’s low of $4,100.00. First resistance is seen at $4,500.00 and then at today’s high of $4,537.10. First support is seen at $4,300.00 and then at $4,250.00. Wyckoff's Market Rating: 4.0.
May silver futures are bulls see their next upside price objective is closing prices above solid technical resistance at $80.00. The next downside price objective for the bears is closing prices below solid support at $60.00. First resistance is seen at today’s high of $71.03 and then at $75.00. Next support is seen at $65.00 and then at today’s low of $61.21. Wyckoff's Market Rating: 3.5.
