Big drop in oil, rising bond yields sink gold, silver

(Kitco News) - Gold and silver prices are lower in midday U.S. trading Monday, as strong losses in crude oil and rising U.S. bond yields are pressuring the precious metals to start the trading week. Gold and silver market bulls can correctly argue that today’s losses were just routine downside price corrections in existing near-term uptrends. April gold futures were last down $15.90 at $1,938.20 and May Comex silver was last down $0.375 at $25.24 an ounce.

Global stocks markets were mixed overnight. The U.S. stock indexes are lower at midday. The Russia-Ukraine war continues to sap trader and investor confidence, with rising inflation doing the same. The marketplace is now factoring in a more aggressive pace for the Federal Reserve to raise U.S. interest rates, including 50 basis points at the May FOMC meeting, and maybe the same at the meeting after that.

Also worrisome to the marketplace is China placing its major city of Shanghai in a major Covid rolling lockdown. Reports said Tesla has halted production in its factory at Shanghai. Crude oil prices dropped in part on the news.

The key outside markets see Nymex crude oil prices sharply lower and trading around $108.00 a barrel. The U.S. dollar index is higher early today. The benchmark U.S. 10-year Treasury note is presently yielding 2.452%, after overnight rising to the highest in almost three years. Parts of the yield curve have now inverted, which is suggesting weakening U.S. economic growth.

Technically, April gold futures were bulls have the overall near-term technical advantage but trading has turned sideways and choppy again. Bulls' next upside price objective is to produce a close above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the March low of $1,895.20. First resistance is seen at $1,950.50 and then at last week’s high of $1,967.20. First support is seen at today’s low of $1,924.50 and then at last week’s low of $1,909.80. Wyckoff's Market Rating: 6.5

May silver futures bulls have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the March high of $27.495 an ounce. The next downside price objective for the bears is closing prices below solid support at $24.00. First resistance is seen at $25.50 and then at today’s high of $25.795. Next support is seen at $25.00 and then at last week’s low of $24.695. Wyckoff's Market Rating: 6.5.

May N.Y. copper closed up 220 points at 472.10 cents today. Prices closed nearer the session high today. The copper bulls have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 500.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the March low of 446.85 cents. First resistance is seen at last week’s high of 481.75 cents and then at 490.00 cents. First support is seen at today’s low of 464.20 cents and then at 460.00 cents. Wyckoff's Market Rating: 6.5.

By Jim Wyckoff

For Kitco News

 jwyckoff@kitco.com

www.kitco.com