Gold, silver sell off as USDX rallies, bond yields rise
Gold and silver prices are lower near midday Thursday, pressured by a rally in the U.S. dollar index and rising U.S. Treasury yields. The two metals lost moderate overnight gains that came on safe-haven demand amid the Iran war that has elevated risk aversion in the general marketplace. April gold was last down $61.20 at $5,073.70. March silver prices were down $1.598 at $81.10.
In other news, the Trump administration and Venezuela’s state mining company have finalized a deal that would see the South American country selling as much as 1,000 kilograms of gold to U.S. markets, the news website Axios reported on Wednesday and as reported by Bloomberg. “The deal would require the Venezuelan-owned Minerven to sell between 650 to 1,000 kilos of gold dore bars to the commodities trader Trafigura, Axios said, citing anonymous people familiar with the matter. Trafigura, according to the report, would then distribute the gold to U.S. refineries under a separate arrangement.” The report of the deal comes after a meeting between U.S. Interior Secretary Doug Burgum and Venezuela’s interim President Delcy Rodriguez on Wednesday to discuss mining reforms and mineral extraction.
The key other outside market today sees Nymex crude oil prices sharply higher, hitting a nine-month high and trading around $79.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.148 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 this week’s high of $5,434.10. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $5,000.00. First resistance is seen at today’s high of $5,204.30 and then at $5,250.00. First support is seen at this week’s low of $5,005.00 and then at $4,900.00. Wyckoff's Market Rating: 7.0.
March silver futures bulls see the next upside price objective is closing prices above solid technical resistance at this week’s high of $95.86. 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 today’s high of $84.15 and then at $85.00. Next support is seen at this week’s low of $79.00 and then at $77.50. Wyckoff's Market Rating: 5.0.
