Relentless rise in USDX, bond yields keep stranglehold on metals bulls
Gold and silver prices are lower again at midday Tuesday, with December gold futures hitting another 10-month low and December silver futures another 6.5-month low. A very strong U.S. dollar and rising U.S. Treasury yields that are at 16-year highs, with both showing no signs of backing down, are keeping precious metals in a tailspin. December gold was last down $7.90 at $1,839.10 and December silver was down $0.031 at $21.40.
The metals market bears are pouncing on the “higher for longer” U.S. interest rate scenario. The benchmark 10-year Treasury note yield is at its highest level since 2007. A Barron’s headline today reads: “The bond sell off is gathering pace. Why the Fed isn’t intervening.” The story suggests the Federal Reserve is content with rising Treasury yields as it helps in the inflation battle the central bank is presently waging.
U.S. stock indexes are solidly lower and are at or near their for-the-move lows, on worries about rising interest rates choking economic growth. The sell off in the stock market is likely limiting losses in the gold and silver markets, as it appears some safe-haven demand is surfacing.
The Fed to hike rates again in November, rate cuts coming only in 2025, here's why – Pat LaVecchia
The key outside markets today see the U.S. dollar index higher and hitting another 10-month high. Nymex crude oil prices are higher and trading around $90.00 a barrel. Meantime, the benchmark U.S. Treasury 10-year note yield is presently fetching 4.754% and hit a 16-year high.
Technically, December gold futures prices hit another 10-month low today. Bears have the solid overall near-term technical advantage. An accelerating five-month-old downtrend is in place on the daily bar chart. However, the market is well short-term oversold and due for a decent corrective bounce very soon. 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 $1,850.00 and then at this week’s high of $1,864.70. First support is seen at today’s low of $1,830.90 and then at $1,825.00. Wyckoff's Market Rating: 1.0.
December silver futures prices hit another 6.5-month low today. The silver bears have the solid overall near-term technical advantage. A nine-week-old downtrend is in place on the daily bar chart. However, the market is short-term oversold and due for a corrective bounce very soon. Silver bulls' next upside price objective is closing prices above solid technical resistance at $23.00. The next downside price objective for the bears is closing prices below solid support at the March low of $20.615. First resistance is seen at today’s high of $21.595 and then at $22.00. Next support is seen at $21.00 and then at today’s low of $20.87. Wyckoff's Market Rating: 2.0.
December N.Y. copper closed down 225 points at 361.90 cents today. Prices closed near mid-range and hit a 10-month low today. The copper bears have the solid overall near-term technical advantage. Prices are in a choppy, two-month-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at last week’s high of 378.60 cents. The next downside price objective for the bears is closing prices below solid technical support at 350.00 cents. First resistance is seen at today’s high of 364.80 cents and then at 370.00 cents. First support is seen at today’s low of 358.15 cents and then at 355.00 cents. Wyckoff's Market Rating: 2.0.
By
Jim Wyckoff
For Kitco News
David