Gold, silver punished by strong USDX that hits 20-year high

Gold and silver prices are sharply lower in midday U.S. trading Thursday, pressured in part by a very strong U.S. dollar index that today scored a 20-year high. Bearish charts are also keeping the technically based bears active on the sell side in the futures markets. June gold futures were last down $19.20 at $1,834.50. July Comex silver futures hit a 22-month low today and were last down $0.70 at $20.87 an ounce.

Global stock markets were mostly lower overnight. U.S. stock indexes are lower at midday and hit 12-month lows. Risk aversion remains elevated amid the Russia-Ukraine war that shows no signs of ending, Covid lockdowns in China and problematic price inflation that is gripping the globe. Traders worry the U.S. and other major economies will slip into recession in the coming months, due to the aforementioned factors.

The U.S. got another inflation reading Thursday with the producer price index for April, which came in up 11%, year-on-year. That was down just a bit from the March PPI reading of up 11.5%, but still hot nonetheless.

Nothing can fix inflation now, 'economic stupidity' is underway by the Fed, Biden – Steve Hanke

In other news, the crypto currencies continue to get hammered amid the keener risk aversion in the marketplace. Bitcoin prices dropped to a 16-month low below $26,000 overnight.

The key outside markets today see Nymex crude oil futures prices up a bit and trading around $106.00 a barrel. Meantime, the U.S. dollar index is sharply higher and hit a 20-year high. The yield on the 10-year U.S. Treasury note is fetching 2.846%.

Technically, June gold futures see a two-month-old price downtrend in place on the daily bar chart. Bears have the firm overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at $1,900.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at today’s high of $1,858.80 and then at $1,864.70. First support is seen at this week’s low of $1,830.60 and then at $1,815.00. Wyckoff's Market Rating: 3.0.

July silver futures prices closed nearer the session low and hit a 22-month low today. A steep price downtrend is in place on the daily bar chart. The silver bears have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $22.50 an ounce. The next downside price objective for the bears is closing prices below solid support at $20.00. First resistance is seen at today’s high of $21.625 and then at $22.00. Next support is seen at today’s low of $20.705 and then at $20.50. Wyckoff's Market Rating: 1.0.

July N.Y. copper closed down 1,225 points at 408.75 cents today. Prices closed nearer the session high today and hit a 7.5-month low. The copper bears have the solid overall near-term technical advantage. A steep price downtrend is in place on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 435.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 400.00 cents. First resistance is seen at 415.00 cents 420.00 cents. First support is seen at today’s low of 403.70 cents and then at 400.00 cents. Wyckoff's Market Rating: 1.5.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips

Tim Moseley

Gold price on 'cusp' of $2k rally, here's how not to miss it – Bloomberg Intelligence

After a disappointing May start, gold could be on a cusp of a major breakout above $2,000 an ounce, according to Bloomberg Intelligence.

After falling 6.5% in the last month, gold is now near a bottom, with the $1,800 an ounce serving as a floor for prices, Bloomberg Intelligence senior commodity strategist Mike McGlone told Kitco News.

Investors have been reevaluating their risk-on positions as the Federal Reserve looks to tighten by 50-basis-points in June and June as it fights inflation.

"Gold is near a bottom and on the cusp of a pretty significant breakout — when it gets above $2,000 an ounce and never looks back," McGlone said. "One day, we're going to wake up, and gold is going to pop above $2,000 an ounce, which is resistance that will be converted into support, and never look back."

The $2,000 an ounce level has been a critical psychological resistance point for gold, which the precious metal failed to sustainably breach this year despite coming close in March.

Gold's main obstacles in the second quarter have been rising U.S. yields and a strong U.S. dollar. This is especially visible when gold's USD performance is compared to yen or euro.

"The dollar strength is putting pressure on the price of gold in terms of the U.S dollar. In terms of the yen, gold is up 20%. In terms of the euro, gold is up 15%. In terms of the U.S. dollar, it's flat. So people holding gold in Europe and Japan are performing much better. It's been a good hedge against their currency declining. It's just a matter of time before but catches up in the U.S. dollar," McGlone explained. "But once you reduce that headwind, which I think we're on the cusp of, gold should take off, and that's just based on past performance."

One of the drivers to trigger the next rally will be markets shifting gears to price the end of the Federal Reserve's tightening cycle. And that is already starting to happen, McGlone pointed out.

"This week was the first good sign that I've seen in a while. I use the one-year-out fed funds future (FF13) for hike expectations. And they are just starting to take away some of that tightening. Why are they doing it? Because the stock market has reached an inflection point of weakness," he said. "I'm looking at bond yields potentially peaking at 3% in the 10-year and the fed funds peaking around 3.4% and dropping to 3%."

The Nasdaq is already down 23% on the year. And this is helping the U.S. stock market reach that inflection point, where Fed's rate hike expectations will be reduced.

"The market is heading that way. We're at that point where the stock market going down is enough to help take the Fed's tightening out of the market and alleviate inflation and shift us back over to a deflationary environment. That's been some of the best foundation for gold in the last few years when gold bottomed in 2015 and 2018," McGlone said.

Gold price is manipulated by the Fed, suspects mining tycoon Frank Giustra, but suppression can't last forever

According to McGlone, the big problem facing the Fed in the long term is not inflation but deflation. "A year from now, when you get April CPI [consumer price index], it'll be much lower, and even negative," he noted.

McGlone did note that it's an if statement. "The Fed wants the stock market down because they need to reduce the ability for people to buy stuff. And I think that's just started to happen."

Crude oil, for example, is very likely to drop to $50 rather than rise to $200. And if the U.S. stock market continues to decline, it's "virtually a guarantee" that inflation will be lower on a 12-month basis. "You want to measure inflation from a big-picture point of view — 120 months. And that's where we see bond yields decline," he said. "The base effect for inflation will go down."

In this scenario, gold will be a primary asset to go to. But when allocating to gold, it is best to pair it with Bitcoin, McGlone added.

"Looking at modern portfolios, gold is naked if not paired with Bitcoin in portfolios," he stated. "Bitcoin is becoming global digital collateral. It's a small portion in virtually all portfolios, and it's gaining momentum. I don't see what stops those trends. Bitcoin's limited supply is a recipe for higher prices unless demand or adoption declines. And I see them rising."
 

By Anna Golubova

For Kitco News

Time to buy Gold and Silver on the dips

Tim Moseley

Investors wait for tomorrow’s CPI inflation report for April

Traders and investors are waiting for the release tomorrow of the Consumer Price Index inflation report that will be released right before New York markets open. The CPI will probably be one of the most important economic reports to be released by the government this month. Not only will the CPI be an integral component that will shape and influence market sentiment of individual investors, but it will also help to guide the Federal Reserve’s monetary policy at next month’s FOMC meeting.

The Federal Reserve sent shock waves through the financial markets when Chairman Powell suggested that a couple more ½% interest rate hikes are a likely possibility at the June and July FOMC meetings. As expected, they raised the Fed funds rate by ½ a percent after this month’s FOMC meeting but the announcement by Chairman Powell of possibly three concurrent ½% interest rate hikes was perceived as hawkish and had a dramatic impact on markets.

With some exceptions, we have seen a substantial price correction occur in U.S. equities and in the precious metals. The cost of borrowing capital rising due to the Federal Reserve’s recent and anticipated rate hikes is intended to reduce demand by creating an economic contraction. This had a profound and negative impact on U.S. equities. Since the pandemic corporations in the United States have become addicted to free money and the extended correction is a reflection of the withdrawal pains by corporations as they adjust their forward guidance to reflect the change in the cost of borrowing capital.

Both gold and silver pricing have been in a defined corrective mode since the middle of April. Gold futures traded to a high of $2003 on April 18 and have been losing value for the last four consecutive weeks including this week which is still far from over. Gold futures basis the most active June 2022 contract opened at approximately $1884 and as of 5:06 PM, EDT is currently fixed at $1837.20 after factoring in today’s price decline of $21.40 or 1.15%. Gold has declined 2.49% in the last two trading days.

Typically, upticks in inflationary pressure create bullish undertones for gold prices as it is regarded as an excellent hedge against inflation. However, the current scenario which is a more aggressive Federal Reserve in regards to raising interest rates leads to rising yields in U.S. Treasuries and a strong dollar. Both dollar strength and rising yields have the opposite effect on gold prices creating strong bearish market sentiment as higher Treasury yields reduce investor's attraction to gold as it is a non-interest yielding asset and because gold is paired against the dollar, there is a 100% negative correlation between increased value in the dollar and gold pricing. The net result is that rising inflation took gold prices to $2078 during March (one edge of the sword) and then to its current pricing at $1835 (The other edge of the sword). The drop from $2078 to gold’s current price is a decline of 11.59%. Truly inflationary pressure is a double-edged sword for gold.

The latest forecast for tomorrow’s CPI report is that inflation will drop from 8.5% to 8.1%. The question becomes how will gold prices react if the actual numbers are above the current estimate? While high levels of inflation have historically been extremely bullish taking gold prices higher the anticipation of a more hawkish Federal Reserve will have the opposite effect.
 

By Gary Wagner

Contributing to kitco.com

Time to buy Gold and Silver on the dips

Tim Moseley

Cash is the king as financial market melt-down continues taking gold lower

The selling pressure continued as U.S. equities continued in their dramatic decline. On March 28, the S&P 500 hit an intra-week high of 4635. What followed was five consecutive weeks of dramatically lower values. If today’s selling pressure indicates the week ahead, we could certainly witness U.S. equities declining over the last six consecutive weeks. In this short period, the S&P 500 has lost almost 14% in value (-13.89%). Today alone, the S&P 500 lost 3.20%. However, it was the NASDAQ composite that had the greatest percentage decline breaking below 12,000. After factoring in today’s decline of 521.41 points, the tech-heavy index closed at 11,623.25.

Gold prices also experienced a sharp price decline and as of 4:55 PM EDT, the most active June 2022 futures contract is down $29.20 or 1.55% and fixed at $1853.40. The only precious metal to gain value on the day was palladium. Palladium futures gained $50.30 a net gain of 2.49%, and are currently fixed at $2073.50.

The dramatic sell-off in financial markets and the precious metals are in response to both the recent action of the Federal Reserve as well as the Fed outlook for the next two FOMC meetings. The Federal Reserve raised the Fed funds rate by half a percent at this month’s FOMC meeting and indicated that it would likely continue the trend of ½% rate hikes at both the June and July FOMC meeting.

This led to the recent sharp uptick in yields in U.S. Treasuries, with the 10-year Treasury note yield trading to a high of 3.2% today before settling at 3.039%. Higher yields in U.S. debt have been highly supportive of the U.S. dollar taking its value higher when compared to other currencies, and that has pressured both gold and silver prices lower.

The sharp decline in U.S. equities and precious metals over the last month can be directly tied to the spiraling level of inflation. This week on May 11, the U.S. Bureau of Labor Statistics will release the CPI for April. Currently, the Consumer Price Index is at 8.5%, the highest value seen since January 1982. The spiraling level of inflation is at the root of the recent rate hikes by the Federal Reserve as they attempt to slow down economic expansion to bring inflationary pressures down.

Forecasts for the April CPI differ with some analysts projecting a leveling off for a peak in inflationary pressures and others projecting that inflation will continue to run hot. According to Forbes, “April’s CPI estimate will be announced Wednesday before the stock markets open. Expectations are for the all-items rate to drop from 8.5% to 8.1%. To hit 8.1%, the month-to-month inflation rate will have to fall from 2.3% in January, 2.6% in February, and 3.8% in March to no more than 1.25% to hit the expected number.”

However, inflation forecasts released in Bloomberg Markets today say that according to a New York Fed survey, “Longer-Term Inflation Expectations Rise.” In an article penned by Alexandre Tanzi, he reported that “U.S. consumers project inflation in three years to be higher compared with a month ago, a potentially worrying sign for the Federal Reserve as the central bank tries to keep longer-term expectations anchored.”

Whether inflation levels continue to rise to higher levels as they have throughout this year or begin to peak, the probability that exceedingly high levels of inflation will continue to be persistent and not transitory as the Federal Reserve had maintained until recently with Chairman Powell and other Fed members saying that longer-term inflation expectations remain well-anchored.

While the Federal Reserve’s action of sharp rate hikes will most certainly lead to an economic contraction, the Fed cannot control the supply chain issues or the war in Ukraine which have been primary forces that have caused inflation to spike higher.

Wishing you as always good trading,

By Gary Wagner

Contributing to kitco.com

Time to buy Gold and Silver on the dips

Tim Moseley

Here's why gold is 'the most confusing' commodity right now

The latest comments from the Federal Reserve triggered a massive selloff across all risk assets. But why is gold still below the $1,900 level? Here's a look at Kitco's top three stories of the week:

3. Gold and bitcoin jump as Fed's Powell takes 75bps hike off the table in June

2. Bitcoin price plummets, gold gives up gains and stocks plunge in post-Fed trading

1. Gold is 'the most confusing' of all commodities right now, here's why

By Anna Golubova

For Kitco News

Time to buy Gold and Silver on the dips

Tim Moseley

Is the Fed facing a credibility problem and why is gold price the 'punching bag'?

Extreme volatility in the marketplace in reaction to the latest policy shift by the Federal Reserve has many risk-on assets in a downward spiral, but why is gold — a safe-haven asset — once again 'the punching bag'?

Gold failed to hold above the $1,900 an ounce level this week as markets had a very erratic reaction to the Fed raising rate by half-a-point Wednesday while ruling out a 75-bps hike at the June meeting. The precious metal is ending the week down 1.6%, with June Comex gold futures last trading at $1,883.30 an ounce.

The Fed had one of the most highly anticipated announcements this week, and markets showed it, with the Nasdaq reversing all immediate gains and plummeting 5% on Thursday in its worst one-day sell-off since June 2020.

The markets wonder if the Fed has made a mistake – making a recession in the U.S. inevitable, OANDA senior market analyst Edward Moya told Kitco News.

"Wall Street now believes that the Fed is on a set course of delivering half-a-point rate hikes over the next couple of meetings, and at then Jackson Hole, they'll have to decide whether to continue or change course," Moya said. "Many traders thought that the Fed needed to keep all options on the table to aggressively fight inflation. But the Fed is signaling they believe inflation is peaking. There is this fear that possibly the Fed made a mistake and might have to send the economy into a recession a lot sooner."

After stating they are "not actively considering a 75 basis-point hike, the U.S. central bank has locked itself into slightly more gradual tightening. In response, the bond market has resumed its sell-off, pushing the U.S. dollar index back close to 20-year highs, which is bad news for gold, added Moya.

This market reaction could also signify that the Fed is losing its credibility, especially after underestimating inflation as transitory last year.

"My reading is that the Fed faces a credibility problem with market participants. There's concern that the Fed could cause a recession by hiking rates," Gainesville Coins precious metals expert Everett Millman told Kitco News. "Important to consider an inverse relationship between interest rates and unemployment. Unemployment is very low right now. If markets perceive the Fed as willing to let unemployment rise to tame inflation, that is still not a great outcome. There is fear of causing prolonged periods of unfavorable conditions for risk assets."

Uranium price has a lot more runway left and needs to double for supply to meet demand – Sprott's Ciampaglia

There has been massive liquidation of risk assets in the post-Fed trading, with many investors moving into cash, Millman pointed out. "That's why all markets crashed together," he said.

It is important to remember that gold held reasonably well considering how high the U.S. dollar is. And even though gold remains vulnerable to pullbacks, Millman remained bullish.

"The pullback gives gold plenty of room to run," he said. "Plus, the highs of the U.S. dollar index could be near the top. That would be good for gold as it sets up a macroeconomic environment favorable to the precious metal. But prices are still likely to experience elevated intraday volatility."

Gold has been "a punching bag for quite some time," Moya described, adding that until the U.S. dollar comes down, the precious metal will continue to struggle.

"If we continue to see risk aversion across equities and if the dollar appreciation is not as strong as we've got used to seeing, gold should start to stabilize. There is still a big risk that we could have another major move in the bond market, and gold could still be vulnerable to the last major sell-off before things bottom out," he explained.

Key resistance for next week will be the $1,900-$1,920 an ounce, and the $1,850 level will be the first support target, which, if breached, could send prices to $1,800, Moya stated.

Markets will be extra data-dependent next week, and the critical dataset to watch will be the U.S. inflation numbers from April.

One significant risk is the longer the supply chain problems last and the war in Ukraine persists, the more it puts a drag on growth, Moya added. And China is not budging from its zero-COVID policy. "That is difficult for the inflation outlook. I am not convinced that we'll see it significantly ease," he said.

Market consensus calls are expecting the annual inflation in the U.S. to slow to 8.1% in April after accelerating to 8.5% in March.

"Consumer price inflation is the key number out of the U.S. next week and it should hopefully show inflation has passed the peak with the year-on-year rate slowing … and core inflation edging down," said ING chief international economist James Knightley. "Lower gasoline prices will be a big help, as will a drop in second-hand car prices as heralded by data from the Mannheim car auctions. However, it will be a long slow descent to get to the 2% target."

Data to watch next week

Wednesday: U.S. CPI

Thursday: U.S. jobless claims and PPI

Friday: Michigan consumer sentiment
 

By Anna Golubova

For Kitco News

Time to buy Gold and Silver on the dips

Tim Moseley

Reversals across many markets, while gold remained resilient

This week the Federal Reserve addressed revisions to its current monetary policy in its attempt to reduce the current levels of inflation to an acceptable target. The statement released after the FOMC meeting, coupled with Chairman Powell’s press conference, resulted in extreme volatility in many financial sectors.

Market participants witnessed one of the strongest knee-jerk reactions and complete market sentiment reversal over 24 hours. The initial market sentiment was extremely short-lived as it was followed by a complete turnaround from the initial reaction the following trading day.

The release of the Federal Reserve’s FOMC statement, coupled with Chairman Powell’s press conference, resulted in a major rally in U.S. equities. The Standard & Poor’s 500 gained almost 3%, the largest daily gain in two years. Equities overall experienced the best Fed-day return since 2011. It significantly impacted gold, moving the precious yellow metal higher. Concurrently, the dollar had a significant decline losing almost 1%, and yields on U.S. Treasuries were also significantly declining.

Yesterday market participants had 24 hours to digest the information presented by the Federal Reserve through the May FOMC statement and comments from Chairman Powell during the press conference. This resulted in a 180° reversal from the reaction on Wednesday. U.S. equities declined sharply, declining more than Wednesday’s gains. The S&P 500, which gained almost 3% on Wednesday, declined by 3.56% on Thursday. On Wednesday, 95% of the stocks contained in that index had daily gains. However, on Thursday, over 95% of the stocks included in the index experienced sharp declines.

Extreme price volatility was also evident in the U.S. dollar and U.S. Treasuries and bonds. The dollar index had a significant decline of just under 1% Wednesday, followed by gains of 0.96% yesterday. On Wednesday, investors also witnessed sharp declines in U.S. Treasuries yields, followed by a complete 180° reversal yesterday. Yesterday yields on the 10-year Treasury Note advanced to 3.043%, and 30-year Treasury bonds gained 17 basis points yielding 3.176%.

However, it was gold that seemed to have price stability resulting in three consecutive days of higher pricing. As of 6 PM EDT gold futures basis, the most active June 2021 contract is currently up to $7.10 or 0.38% and fixed at $1882.80. Unquestionably this was a week that will be remembered for quite some time, considering the major price reversals on Wednesday and Thursday.

By Gary Wagner

Contributing to kitco.com

Time to buy Gold and Silver on the dips

Tim Moseley

Gold firmer but loses altitude as USDX, bond yields spike up

Gold prices are posting modest gains in midday U.S. trading Thursday but the bulls are fading fast after solid early gains have been erased. The precious metals markets are being buffeted today by strong gains in the U.S. dollar index and a big spike up in U.S. Treasury yields. June gold futures were last up $5.70 at $1,874.30 and May Comex silver was last down $0.037 at $22.33 an ounce.

Traders Thursday were still digesting the Federal Reserve move Wednesday afternoon to raise its key interest rate, the Fed funds rate, by 0.5%, which was expected by the marketplace. After some initial exuberance by the marketplace that the Fed was becoming less hawkish on U.S. monetary policy, traders and investors came to their senses and realized nothing has changed: the Fed will have to remain aggressive and hawkish in its fight to tame inflation that is presently still out of control.

The key outside markets today sees Nymex crude oil futures prices down and trading around $107.00 a barrel after trading above $111.00 earlier today. The U.S. dollar index is solidly higher at midday and hit a new 20-year high. The yield on the 10-year U.S. Treasury note is presently fetching 3.082%, which is a 3.5-year high. It’s been quite a while since Treasury bond futures prices were down over 3 full points in a day.

Gold remains on track as Federal Reserve lays out path for 50-bps rate hikes – State Street's Milling-Stanley

Global stock markets were mixed overnight, with European shares mostly up and Asian shares mostly down. U.S. stock indexes are sharply lower at midday and have taken back all of Wednesday’s big gains and then some. The keener risk aversion in the marketplace should keep a floor under the safe-haven metals prices at their present levels.

The Bank of England is at its regular monetary policy meeting raised its interest rate by 0.25%. The BOE raised its annual inflation forecast significantly, to 10.25%. A rate hike was expected but the inflation forecast was a surprise on the upside.

Traders and investors are now awaiting Friday morning’s U.S. employment situation report for April. The key non-farm jobs number in the report is expected to come in at up 400,000, which compares to a rise of 431,000 in the March report.

Technically, June gold futures see a downtrend is place on the daily bar chart. Bears have the overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at last week’s high of $1,935.50. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at $1,900.00 and then at today’s high of $1,910.70. First support is seen at Wednesday’s low of $1,861.10 and then at this week’s low of $1,849.70. Wyckoff's Market Rating: 4.0

May silver futures see a steep price downtrend in place on the daily bar chart. The silver bears have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $24.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the December low of $21.445. First resistance is seen at $23.00 and then at today’s high of $23.245. Next support is seen at Wednesday’s low of $22.135 and then at this week’s low of $22.12. Wyckoff's Market Rating: 2.5.

May N.Y. copper closed down 495 points at 427.90 cents today. Prices closed near the session low today. The copper bears have the firm overall near-term technical advantage. A price downtrend is in place on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 450.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the December low of 411.65 cents. First resistance is seen at Wednesday’s high of 438.55 cents and then at today’s high of 442.00 cents. First support is seen at Wednesday’s low of 424.00 cents and then at this week’s low of 419.00 cents. Wyckoff's Market Rating: 3.0.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips

Tim Moseley

Gold, silver see tepid short covering after recent losses

Gold and silver prices are firmer in midday U.S. Trading Tuesday. Short covering by the shorter-term futures traders was feature today after both metals hit 2.5-month lows on Monday. The bulls are trying to stop the bleeding in down-trending markets that have been punished by a strong U.S. dollar and rising bond yields. June gold futures were last up $7.50 at $1,871.10 and May Comex silver was last up $0.101 at $22.65 an ounce.

The economic data point of the week in the U.S. Federal Reserve Open Market Committee (FOMC) meeting that began Tuesday morning and ends Wednesday afternoon with a statement. It's widely believed the Fed will raise the key U.S. interest rate by 0.5%, amid the highest inflation levels in 40 years. The monthly U.S. jobs report is also due out Friday morning.

The key outside markets today sees Nymex crude oil futures prices lower and trading around $103.00 a barrel. The U.S. dollar index is weaker in early trading. The yield on the 10-year U.S. Treasury note is presently fetching 2.954%. The 10-year yield early this week hit a 3.5-year high just above 3%. The yield on the benchmark German 10-year bond (bund) rose above 1% for the first time since 2015.

Global stock markets were mostly higher overnight. U.S. stock indexes are mixed at midday. The Nasdaq and S&P stock indexes are near their 12-month lows scored Monday. A brief "flash crash" occurred in European stock markets Monday, reportedly on an erroneous trade entered by a Citigroup in Sweden.

Paul Tudor Jones: 'Capital preservation is the most important thing' right now

In other, the Euro zone producer price index for March was up 5.3% from February and up 36.8%, year-on-year. The mammoth rise was mostly due to soaring energy costs, but still, excluding energy the PPI was up 13.6%, year-on-year.

Australia's central bank overnight raised its key interest rates by 0.25%–the first rate hike by the Reserve Bank of Australia in a decade.

Technically, June gold futures See a price downtrend still in place on the daily bar chart. Bears have the overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at last week's high of $1,935.50. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at today's high of $1,878.40 and then at $1,883.00. First support is seen at today's low of $1,849.70 and then at $1,835.00. Wyckoff's Market Rating: 4.0

May silver futures see a steep price downtrend in place on the daily bar chart. The silver bears have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $24.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the December low of $21.445. First resistance is seen at Monday's high of $22.83 and then at $23.00. Next support is seen at today's low of $22.475 and then at this week's low of $22.12. Wyckoff's Market Rating: 2.5.

May N.Y. copper closed up 70 points at 426.25 cents today. Prices closed nearer the session low today. Prices Monday hit a 4.5-month low. The copper bears have the solid overall near-term technical advantage. A price downtrend is in place on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 450.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the December low of 411.65 cents. First resistance is seen at today's high of 434.40 cents and then at this week's high of 438.55 cents. First support is seen at this week's low of 419.00 cents and then at 415.00 cents. Wyckoff's Market Rating: 3.0.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips

Tim Moseley

Gold, silver smacked by strong USDX, rising bond yields, technical selling

Gold and silver prices are sharply lower in midday U.S. Trading Monday, with both scoring 2.5-month lows. The precious metals are getting hit early this week by the bearish outside market forces of a strong U.S. dollar index that is near a 20-year high, higher U.S. Treasury yields and chart-based selling pressure as the near-term technical have eroded significantly the past two weeks. June gold futures were last down $42.50 at $1,869.40 and May Comex silver was last down $0.42 at $22.62 an ounce.

The economic data point of the week in the U.S. Federal Reserve Open Market Committee (FOMC) meeting that begins Tuesday morning and ends Wednesday afternoon with a statement. It’s widely believed the Fed will raise the key U.S. interest rate by 0.5%, amid the highest inflation levels in 40 years. The monthly U.S. jobs report is also due out Friday morning.

The key outside markets today sees Nymex crude oil futures prices slightly lower and trading around $104.50 a barrel. The U.S. dollar index is solidly higher today and not far below last week’s 20-year high. The yield on the 10-year U.S. Treasury note is presently fetching 2.99%–the highest in nearly 3.5 years.

Global stock markets were mostly lower overnight. Markets in China and Hong Kong were closed for a holiday. U.S. stock indexes are mixed at midday. The U.S. stock indexes are trying to recover from April’s losses, which were the worst since the beginning of the pandemic.

Gold is an 'ideal' asset right now but why isn't the price higher? Fidelity weighs in

Three major elements in the marketplace remain static but still prompting risk aversion among traders and investors: the Russia-Ukraine war, the Covid outbreak in China and problematic inflation around the globe.

China’s strict lockdowns to curb Covid-19 cases are taking a toll on the world’s second-largest economy and further disrupting global supply chains. China President Xi Jinping is under pressure to deliver on pledges to support economic growth. China’s manufacturing and services purchasing managers indexes (PMI)in April plunged to their worst levels since February of 2020.

Technically, June gold futures prices hit a 2.5-month low today. A price downtrend is in place on the daily bar chart. Bears have the overall near-term technical advantage and gained more power today. Bulls' next upside price objective is to produce a close above solid resistance at last week’s high of $1,935.50. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at $1,883.00 and then at $1,900.00. First support is seen at today’s low of $1,853.40 and then at $1,800.00. Wyckoff's Market Rating: 4.0

May silver futures prices hit nearly three-month low today. A steep price downtrend is in place on the daily bar chart. The silver bears have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $24.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the December low of $21.445. First resistance is seen at today’s high of $22.83 and then at $23.00. Next support is seen at today’s low of $22.12 and then at $22.00. Wyckoff's Market Rating: 2.5.

May N.Y. copper closed down 1,415 points at 425.35 cents today. Prices closed nearer the session low today and hit a 4.5-month low. The copper bears have the solid overall near-term technical advantage. A price downtrend is in place on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 450.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the December low of 411.65 cents. First resistance is seen at 430.00 cents and then at today’s high of 438.55 cents. First support is seen at today’s low of 419.00 cents and then at 415.00 cents. Wyckoff's Market Rating: 3.0.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips

Tim Moseley