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(Kitco News) – Gold prices are a bit higher and silver prices a bit lower in early US trading Wednesday. Rising bond yields have the precious metals bulls squeamish at mid-week, amid hawkish rhetoric coming from the Federal Reserve. Traders are highly anticipating the afternoon release of the Fed’s FOMC minutes. June gold futures were last up $1.00 at $1,928.60 and May Comex silver was last down $0.244 at $24.28 an ounce.
Global stocks markets were mixed to weaker overnight. The US stock indexes are pointed toward lower openings when the New York day session begins. The Russia-Ukraine war is still on the front burner of the marketplace as more economic sanctions are levied against Russia for its war atrocities against Ukrainian citizens. That is keeping energy prices elevated as European countries consider banning Russian energy imports.
The other matter on the front burner is rising inflation. Usually dovish Fed governor Lael Brainard on Tuesday said the Russia-Ukraine war has further stoked inflation and that inflation must be tamped down aggressively. She also suggested the Fed will begin selling off its big balance sheet of bonds (quantitative tightening). US Treasury yields spiked up on her remarks. Traders are hoping to get better clarity of the Fed’s interest rate and balance sheet intentions by scrutinizing Wednesday afternoon’s minutes from the last FOMC meeting three weeks ago. The benchmark US 10-year Treasury note currently yields 2.646%. The 2-year/10-year Treasury note spread quickly snapped out of its inversion after Brainard’s hawkish tone on US monetary policy.
Speaking of inflation, the Euro zone reported its producer price index for February up a shocking 31.4%, year-on-year. Excluding food and energy, the PPI was up “only” 12.2% from last February.
Nymex crude oil prices are up and trading around $103.50 a barrel. Meanwhile, the US dollar index is slightly higher early today.
US economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the global services PMI, the weekly DOE liquid energy stocks report and the FOMC minutes.
Technically, the June gold futures bulls have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in April futures above major resistance at $2,000.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,850.00. First resistance is seen at the overnight high of $1,937.60 and then at $1,950.00. First support is seen at the overnight low of $1,916.20 and then at $1,900.00. Wyckoff’s Market Rating: 6.0
May silver futures bulls have the slight overall near-term technical advantage but need to show fresh power soon to keep it. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $25.50 an ounce. The next downside price objective for the bears is closing prices below solid support at the March low of $24,045. First resistance is seen at $24.55 and then at $25.00. Next support is seen at $24.045 and then at $24.00. Wyckoff’s Market Rating: 5.5.
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