March 22, 2023

Gold surges as USDX, US bond yields tumble after cooler CPI

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(Kitco News) – Gold and silver prices are clearly higher in mid-day US trading on Thursday. Gold hit a 2.5-month high and silver hit a 4.5-month high after the US inflation report came in just slightly cooler than market expectations. in turn pushed the US dollar index and US Treasury yields sharply lower. December gold was last up $38.60 at $1,737.90 and December silver was up $0.323 at $21.66.

The US CPI report for October rose 7.7% from a year ago, compared to expectations for a 7.9% increase, compared to an 8.2% increase in the September report. This report may be the most important data point of the month, if not the quarter. A slightly cooler CPI reading could influence the Federal Reserve’s decision-making process ahead of its December FOMC meeting. The Wall Street Journal reports that the Fed is likely to raise its fed funds rate by 0.5 percent in December after December. Up 0.75% from previous FOMC meetings.

U.S. stock indexes rose on a cooler CPI, and Bitcoin also rose sharply after the report. However, the cryptocurrency market remains in turmoil at the end of this week, with fears of contagion and crypto illiquidity. Broker SP Angel reported via email this morning: A proposed takeover of rival Binance by insolvent crypto exchange FTX is likely to fail, sending Bitcoin down 26% this week and raising concerns about wider market contagion. The FTX exchange, founded by Sam Bankman-Fried (compared to John Pierpont Morgan during the 1907 banking crisis), is seeking support from a reported $8 billion debt shortfall. The exchange’s default has triggered a fall in the value of the crypto market, with the total crypto market valued at $914 billion, down from more than $3 trillion in November 2021. According to JP Morgan, crypto market participants are facing a “cascade” of margin calls, although it is unclear whether this will feed into the broader stock market.

In key external markets, the US dollar index fell sharply today, hitting a two-month low after a cooler consumer price index. Nymex crude oil prices are higher and trade around $87.25 per barrel. The US 10-year Treasury yield is at 3.852% and has fallen sharply since the cooler CPI report.

Technically, December gold futures prices hit a 2.5-month high today. Gold futures bulls and bears have returned to a flat general near-term technical playing field. Bulls have momentum as the downtrend in prices on the daily bar chart has been reversed. This week’s prices have also seen a bullish move out of the trading range, suggesting even more upside in the near future. The bulls’ next upside price objective is to produce near solid resistance at $1,800.00. The Bears’ next near-term bearish target is to drive futures prices below solid technical support at the November low of $1,618.30. First resistance is seen at today’s high of $1,757.20 and then $1,775.00. The first allowance is $1,738.70 and then $1,725.00. Wyckoff Market Rating: 5.0.

Live 24 hour silver chart [ Kitco Inc. ]

December silver futures hit a 4.5-month high today. Silver bulls have a general near-term technical advantage and have momentum. Prices are in a fluctuating nine-week uptrend on the daily bar chart. The silver bulls’ next upside price objective is to close above solid technical resistance at $23.00. The next slow target for the bears is to close prices below the stable support at $20.00. First resistance is seen at today’s high of $21.94 and then at $22.50. The next support is seen at $21.00 and then this week’s low at $20.435. Wyckoff’s market rating: 6.5.

December NY copper today closed 720 points at 377.15 cents. Prices closed closer to the high of the session and hit a four-month high today. Copper bulls have achieved a general near-term technical advantage. Prices are in a six-week old uptrend on the daily bar chart. The copper bulls’ next bullish price objective is to raise and close prices above solid technical resistance at 400.00 cents. The bears’ next price-lowering goal is to close prices below solid technical support at the October low of 330.30 cents. First resistance is 380.00 cents and then 390.00 cents. First support is seen at today’s low of 362.85 cents and then at this week’s low of 356.25 cents. Wyckoff Market Rating: 6.0.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect his own 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 is not a solicitation to make exchanges in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for any loss and/or damage arising from the use of this publication.

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