Inflation worries tank gold, silver markets
Gold and silver prices are posting big losses and hit six-week lows in midday U.S. trading Thursday. The metals are getting hammered as traders worry about the prospects of problematic inflation keeping central banks’ monetary policies tighter. Such a scenario would not only support the U.S. dollar but also likely limit consumer and commercial demand for gold and silver. April gold was last down $319.20 at $4,576.20. May silver prices were down $8.152 at $69.50.
Gold futures prices are down over $900 an ounce from the late-January record high. Silver prices are down over $50 an ounce from its record high scored in late January. Copper gave up its gains for this year as the worsening war in the Middle East pushed energy prices higher and increased the risk of damage to the global economy. There were broad declines on the London Metal Exchange after Iran and Israel traded strikes on energy facilities in the Middle East. Copper, which started this year in bullish form and reached an all-time high in late January, has shed more than 9% this month.
Federal Reserve officials on Wednesday left U.S. interest rates unchanged, as fully expected by the marketplace. The FOMC said it expects one interest rate cut this year due to increased uncertainty from the war in the Middle East. Fed Chair Jerome Powell emphasized that progress in reducing inflation is needed in order to resume lowering rates, and Fed officials raised their outlook for inflation in 2026 to 2.7% annually. Powell said in his press conference that he has no intention of resigning as a member of the Fed's Board of Governors until an investigation of the Fed by the Department of Justice has concluded.
The key outside markets today see the U.S. dollar index weaker, with Nymex crude oil prices firmer and trading around $97.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.25 percent.
Technically, April gold futures bulls’ next upside price objective is to produce a close above solid resistance at $5,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the February low of $4,423.20. First resistance is seen at $4,750.00 and then at $4,800.00. First support is seen at today’s low of $4,505.00 and then at $4,450.00. Wyckoff's Market Rating: 4.0.
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 the February low of $64.66. First resistance is seen at $72.50 and then at $75.00. Next support is seen at today’s low of $65.55 and then at $64.66. Wyckoff's Market Rating: 4.0
