Gold Solidly Down On Likely U.S. Rate Hike Soon, Bearish Outside Mkts

(Kitco News) - Gold prices were ending the U.S. day session solidly lower Thursday, on heavy profit-taking from the shorter-term futures traders after prices Monday hit a 3.5-mongh high. There are also several gold-bearish elements at work this week that include increased investor risk appetite, growing notions of an impending U.S. interest rate increase, and a stronger U.S. dollar. April Comex gold was last down $16.00 an ounce at $1,234.20. May Comex silver was last down $0.699 at $17.785 an ounce.

Global stock markets were mostly weaker Thursday, including the U.S. indexes, on downside corrections following recent good gains. U.S. stock indexes hit record highs Wednesday and had the best one-day gains of 2017.

A major topic in the world marketplace this week is growing notions the U.S. Federal Reserve is set to raise interest rates at its March Federal Open Market Committee (FOMC) meeting. Some more generally upbeat U.S. economic data released recently and more hawkish remarks from Fed officials this week are setting the table for a U.S. interest rate hike soon—likely this month. Federal Reserve Chair Janet Yellen is slated to speak to the Yale law school on Friday at midday.

Another feature this week are rising U.S. and world bond market yields, on ideas of increasing inflationary pressures and rising interest rates. The U.S. two-year Treasury note yield rose to its highest level in seven years on Wednesday. Longer-term, rising and then problematic inflation would be bullish for the precious metals.

The key “outside markets” on Thursday saw the U.S. dollar index trading firmer and hitting another six-week high. The greenback is benefiting from ideas of a U.S. rate hike coming soon. Meantime, Nymex crude oil futures prices were solidly lower today after a weekly DOE report showed U.S. crude oil stockpiles at record highs.

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Technically, April gold futures prices closed nearer the session low today. The gold bulls still have the overall near-term technical advantage but need to show fresh power soon. Prices are in a nine-week-old uptrend on the daily bar chart but now just barely. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,264.90. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,217.50. First resistance is seen at $1,240.00 and then at $1,250.00. First support is seen at today’s low of $1,231.10 and then at $1,225.00. Wyckoff's Market Rating: 6.0

May silver futures prices closed nearer the session low and hit a three-week low today on heavy profit taking after hitting a 3.5-month high on Monday. The silver market bulls still have the slight overall near-term technical advantage. However, a nine-week-old uptrend on the daily bar chart has been negated. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at this week’s high of $18.54 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.00. First resistance is seen at $18.00 and then at $18.25. Next support is seen at today’s low of $17.705 and then at $17.50. Wyckoff's Market Rating: 5.5.

May N.Y. copper closed down 495 points at 268.70 cents today. Prices closed nearer the session low on profit taking. The key “outside markets” were also bearish for copper today as the U.S. dollar index was higher and crude oil prices were lower. The copper bulls still have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the February high of 283.60 cents. The next downside price objective for the bears is closing prices below solid technical support at 250.00 cents. First resistance is seen at today’s high of 274.50 cents and then at this week’s high of 276.85 cents. First support is seen at last week’s low of 265.25 and then at 262.60 cents. Wyckoff's Market Rating: 6.5.