Hey there, market junkies! Gold and silver prices are sliding to end the week, with gold hitting a six-week low and silver reaching a 10-week bottom. What’s driving this sudden drop? Well, it seems like recent U.S. economic data, including a scorching hot producer price index report, has spooked the marketplace into a risk-averse mindset. That’s right, folks – the Fed’s aggressive hawkishness is causing some serious jitters.
Metals traders are shaking their heads, deeming this bearish news for global demand prospects. Central banks are cracking down on their monetary policies to slow economic growth and curb inflation, and that’s got traders and investors feeling some type of way. While the day begin on a sour note with April gold down $15.80 at $1,836.00, and March silver is down $0.34 at $21.37, by mid-day, April gold had recovered, down only $1.10 at $1,850.70, and March silver unchanged at $21.72.
But it’s not just precious metals that are taking a hit. Global stock markets were down overnight, and U.S. stock indexes are driving lower, with the S&P dropping 1% to $4,050. Risk aversion is the name of the game as we head into the weekend.
It appears that the markets are now aligning with the actual state of affairs, and it is necessary to factor in the possibility of interest rate increases. As we see it at GCD, although it has been a long time coming, it seems that the unyielding confidence of investors is now being tested. The most recent PPI data has made it clear that achieving a smooth economic landing in the United States will be an extremely difficult task and there will probably be significant difficulties throughout the process.
So, what about the other outside markets? The U.S. dollar index has shown strong gains and reached a five-week high overnight. Conversely, Nymex crude oil futures are experiencing a sharp drop, currently trading at around $76.00 a barrel. The benchmark U.S. 10-year Treasury note’s yield has been climbing towards the end of this week.
Regarding gold futures, those who have been buying (known as “bulls”) are now at a slight disadvantage. Prices are currently showing a slight decline on the daily chart, and the bulls’ goal is to increase the price and close above a high point of $1,881.60 this week. Conversely, those who have been selling (known as “bears”) are looking to push prices down below a certain level of technical support at $1,800.00. The first level of resistance is at a high point of $1,854.90 on Thursday, followed by $1,870.90 on Wednesday. The first level of support is at a low point of $1,827.70 overnight, followed by $1,820.00. In regards to silver, the sellers have an advantage at the moment, as prices are showing a slight decline on the daily chart. The buyers want to increase the price and close above a certain level of technical resistance at $22.635 for March futures. Conversely, the sellers are looking to push prices down below a solid level of support at $20.00. The first level of resistance is at a high point of $21.585 overnight, followed by $21.875. The first level of support is at a low point of $21.155 overnight, followed by $21.00.
So, buckle up and hold onto your portfolios, folks. It’s going to be a bumpy ride heading into the weekend.