Gold and silver fall after optimistic US economic data

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(Kitco news) – Gold and silver prices are sharply lower on Thursday midday in the US, with gold hitting a nine-week low and silver a two-month low, following better-than-expected US economic data that belongs to the Hawks camp US monetary policy. The soaring US dollar index and rising US Treasury yields are also bearish external market elements working against precious metals. June gold recently fell $20.90 to $1,944.10 and July silver fell $0.325 to $22.92.

The second estimate of US GDP in the first quarter was better than expected, up 1.3% from expectations of 1.1%, and compares with the first reading of GDP of 1.1%. Also the weekly number of new jobless claims in the US was well below market expectations.

Asian and European stock markets were mixed overnight. US stock indices are mixed to stronger at noon. Nasdaq soars after Nvidia easily beat profit estimates in its quarterly report and is up 25%.

The market remains unsettled as U.S. lawmakers and the Biden administration failed to agree on extending the sovereign debt ceiling. However, House Speaker McCarthy said today that negotiators are making progress on the issue. Reuters also reported that Democrats and Republicans are close to a deal. This likely also increased selling pressure on the safe gold and silver markets. US Treasury Secretary Yellen said the government could run out of money by June 1.

Reports say that the rating agency Fitch drew the attention of the United States to the possibility of downgrading the rating. “Fitch still expects the debt ceiling issue to be resolved by Date X (June 1),” the credit agency said in a report. Both Fitch and Moody’s currently rate US debt at the highest levels of AAA and Aaa, respectively, while S&P ranks it at AA+ after downgrading in 2011 as a result of debt containment negotiations at the time.

Key external markets saw the US Dollar Index rise today and reach another two-month high overnight. Nymex crude oil prices are much lower at around $71.50 a barrel. Meanwhile, the benchmark 10-year US Treasury yield is currently at 3.784%.

Current 24-Hour Gold Chart (Kitco Inc.)

Technically, June gold futures prices hit a nine-week low today. The bulls generally have a short-term technical advantage, but they are weakening. Prices are in a three-week downtrend on the daily bar chart. The next target for the bulls in the up price range is to close above a solid resistance at $2000.00. The Bears’ next short-term downside price target is to drive futures prices below the solid technical support of $1,900.00. First resistance is seen at today’s high of $1,965.40, followed by this week’s high of $1,987.90. First support is seen at today’s low of $1,939.20 followed by $1,925.00. Wyckoff’s market rating: 6.0

Live Silver Chart 24 Hours (Kitco Inc.)

July silver futures prices hit a two-month low today. Silver bears generally have a short-term technical advantage. Prices are in a sharp three-week downtrend on the daily bar chart. Another silver bulls price target is to close above the solid technical resistance at $24.50. Another downside target for bears is to close below the $22.00 solid support. First resistance is seen at today’s high of $23.26 followed by Wednesday’s high of $23.655. Next support is $22.75 followed by $22.50. Wyckoff’s market rating: 3.5.

July New York copper fell 250 points at 358.65 cents today. Prices closed near the mid-range today and, after hitting a six-month low on Wednesday, hit a short cover. Copper bears have a definite overall technical edge in the short term. Prices are in a sharp five-week downtrend on the daily bar chart. The next target of the copper bulls is to push and close prices above the solid technical resistance at 380.00 cents. Another downside target for the bears is the closing price below the solid technical support of 335.00 cents. First resistance is visible at Wednesday’s high at 364.55 cents, followed by 370.00 cents. The first support is seen at this week’s low of 354.50 cents and then at 350.00 cents. Wyckoff’s market rating: 3.0.

Reservation: The views expressed in this article are those of the author and may not reflect those of the author 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. It does not constitute a solicitation for any exchange of commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article are not responsible for any loss and/or damage resulting from the use of this publication.

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