(Kitco News) – Gold and silver prices are sharply down in early U.S. trading Wednesday, on heavy profit-taking from the shorter-term futures traders after gold futures hit a record intra-day high and silver hit an eight-month high on Tuesday. Strong losses in crude oil today are also helping to pressure the precious metals markets. April gold futures were last down $50.50 at $1,992.80 and May Comex silver was last down $0.62 at $26.28 an ounce.
Key today for the gold and silver markets will be if the bulls have the courage to step in and buy the big dips. One clue that market tops are in place in the gold and silver markets would be two strong down days in a row.
Global stocks markets were mixed overnight, with European shares mostly up and Asian shares mostly down. The U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins. The U.S. indexes are seeing corrective bounces following recent losses, but are still in near-term price downtrends on the daily charts. Risk aversion remains elevated amid the ongoing Russia-Ukraine war. More and more U.S. companies are pulling away from Russia, including McDonalds and Coca Cola.
Nickel futures are not trading anywhere in the world at present after prices in Shanghai hit their daily limit higher Wednesday. Reports said a single stockpiler had amassed over 50% of all London Metals Exchange nickel inventories, representing around 43,000 metric tons. Trading of nickel on the Shanghai Futures Exchange saw prices surge 17% to the daily limit. Nickel on the LME was suspended Tuesday after prices surged 250% in the first two days of trading this week. Trading on the LME will not resume before Friday, said the exchange. Reports also said a big nickel futures trader in China, called Big Shot, was caught in a major “short squeeze” of over 200,000 metric tons in futures contracts, valued at around $8 billion. The reports said Big Shot, now called Little Shot by traders, is working with banks to unwind his big loss and avoid default.
Bitcoin prices are sharply higher today. Gold prices are down on a corrective pullback after Comex futures hit a record intra-day high on Tuesday.
The key outside markets see Nymex crude oil prices lower and trading around $120.50 a barrel. The U.S. dollar index is lower today after hitting a 21-month high Monday. The benchmark U.S. 10-year Treasury note is presently yielding 1.903%. Treasury yields are on the rise at mid-week.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey and the weekly DOE liquid energy stocks report.
Technically, the April gold futures bulls still have the firm overall near-term technical advantage. However, they appear to have run out of gas. Prices are still in a five-week-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in April futures above major resistance at the record high of $2,078.80. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,950.00. First resistance is seen at $2,000.00 and then at $2,025.00. First support is seen at Tuesday’s low of $1,985.80 and then at $1,976.50. Wyckoff’s Market Rating: 8.0
May silver futures bulls still have the firm overall near-term technical advantage. Prices are still in a five-week-old uptrend on the daily bar chart. However, the bulls now appear to be short-term exhausted. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $28.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $25.00. First resistance is seen at $27.00 and then at $27.50. Next support is seen at $26.00 and then at this week’s low of $25.465. Wyckoff’s Market Rating: 7.0.
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