Gold and silver pounded on notions of tightening monetary policies


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(Kitco News) – Gold and silver prices are down sharply at noon Monday in the US, with gold hitting a more than four-month low at $ 1,676.40, futures contracts October base and silver collapsing to more than eight month lows at $ 22.295, September futures base. However, prices are trading well below their daily lows and are near the mid-range at midday. October gold futures were down $ 34.20 to $ 1,729.90 and September Comex silver was down $ 1.026 to $ 23.315 an ounce.

Metals are still suffering from the fallout from last Friday’s surprisingly strong U.S. jobs report that pushed U.S. stock indexes to or near their all-time highs, rallied the U.S. dollar index, pushed returns on the U.S. US Treasury rising (price falling) – all bearish items for metals.

Gold and silver recovered somewhat from their lowest flash crash lows of the night. Jobs data on Friday immediately sparked heightened speculation that the Federal Reserve would act sooner to ease monetary policies. This really scared the bulls in the metals markets. Apparently, metals traders are currently choosing not to focus on the upward inflationary implications of a rebound in the US economy which is already seeing consumer and producer prices rise.

The overnight gold and silver price flash crash can also be due to difficult trading conditions overnight amid the summer slump. Many traders are on vacation and much of Europe is on vacation in August. Many times the “big boys” like investment banks will make very large trades under low volume futures trading conditions, in order to get their money’s worth, and maybe that’s what happens. happened overnight.

Global stock markets were mixed overnight. US stock indices are mixed at noon.

The burgeoning new Covid strain is also at the center of concerns to start the negotiating week, which again forces major economies to assess measures to contain the spread of the virus. China and other parts of Asia are particularly affected. The Delta surge in tension, if not contained quickly, could put the brakes on any idea of ​​the Federal Reserve to act sooner to scale back its bond buying program (quantitative easing). The Jackson Hole Federal Reserve Symposium later this month could be the economic / markets focal point for the summer. This confab in the past has produced significant developments in monetary policy.

The massive U.S. infrastructure spending plan that looks set to pass Congress and become law eased Covid concerns in the market somewhat earlier this week.

Major foreign markets are now seeing the US dollar index rise to a two-week high. Nymex crude oil futures prices are solidly down amid heightened Covid concerns and are trading around $ 66.65 per barrel. The bulls in the commodities market are keeping a close watch on crude oil, knowing that if the industry-leading crude continues to fall, other commodity markets should be pulled down as well, including metals.

The yield on the 10-year US Treasury bill is currently 1.314%.

Technically, the October gold futures have gained the overall short-term technical advantage. The Bulls’ next bullish price target is to produce a close above the solid resistance at $ 1,800.00. The bears’ next short term bearish price target is pushing futures prices below strong technical support to today’s low of $ 1,676.40. First resistance is seen at $ 1,750.00, then at today’s high at $ 1,763.00. The first support is seen at $ 1,700.00 and then at $ 1,676.40. Wyckoff Market Score: 3.5

24 hour live money graph [ Kitco Inc. ]

September silver futures have the overall short-term technical advantage. The next bullish price target for Silver Bulls is to close the price above strong technical resistance at $ 25.00 an ounce. The next bearish price target for bears is to close prices below solid support at today’s low of $ 22.295. The first resistance is seen at $ 23.75 and then at $ 24.00. The next support is seen at $ 23.00 and then at $ 22.50. Wyckoff Market Rating: 3.0.

September NY copper closed 595 points lower at 428.85 cents today. Prices closed near the mid-range today and hit a two-week low. Copper bulls have the slight overall technical advantage in the short term. The next bullish price target for copper buyers is to push and close the price above strong technical resistance at 450.00 cents. The next bearish price target for bears is to close prices below strong technical support at the June low of 409.40 cents. First resistance is seen at today’s high of 434.35 cents and then 440.00 cents. First support is seen at today’s low at 424.35 cents and then 420.00 cents. Wyckoff market rating: 5.5.

Warning: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. This is not a solicitation to trade in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for any loss and / or damage resulting from the use of this publication.


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