Gold, silver down as risk appetite improves, crude sinks
Gold and silver prices are lower near midday Monday, but prices are up from their daily lows. The metals are seeing price pressure amid a sell off in the crude oil market and a solid rebound in the U.S. stock indexes today. Worries about rising inflation due to the Middle East war have also been limiting buying interest in gold and silver. April gold was last down $56.30 at $5,005.30. May silver prices were down $0.308 at $81.01.
Risk appetite in the general marketplace started to uptick early this morning right around the time U.S. Treasury Secretary Bessent was being interviewed in Paris by CNBC. Bessent said there are some oil tankers passing through the Strait of Hormuz, including Iranian and Indian ships. The stock indexes rallied and crude oil prices sold off.
The Trump administration has started the process of a mammoth drawdown of the U.S. emergency oil reserve, issuing a request to exchange 86 million barrels of crude oil, Bloomberg reported. Deliveries from the Strategic Petroleum Reserve, part of a massive 172 million-barrel release announced last week, are expected to begin moving to market by the end of this week, the Energy Department said in a statement Friday. The release, which is expected to take four months to complete, is part of a 400 million-barrel effort coordinated with other nations aimed at lowering crude, gasoline, diesel and jet fuel prices that have climbed dramatically since the U.S.-Israel invasion of Iran.
The key outside markets today see the U.S. dollar index down, with Nymex crude oil prices lower and trading around $95.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.234 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, April gold futures bulls’ next upside price objective is to produce a close above solid resistance at the March high of $5,434.10. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $4,700.00. First resistance is seen at today’s high of $5,044.50 and then at $5,100.00. First support is seen at the overnight low of $4,970.10 and then at $4,900.00. Wyckoff's Market Rating: 6.0.
May silver futures bulls see their next upside price objective is closing prices above solid technical resistance at $90.00. The next downside price objective for the bears is closing prices below solid support at $72.405. First resistance is seen at today’s high of $81.82 and then at $84.00. Next support is seen at the overnight low of $77.125 and then at $76.00. Wyckoff's Market Rating: 5.5.
