Gold and silver sell off as crude briefly dips below $100

 New York (Mar 14)  Gold and silver prices are solidly lower in midday U.S. trading Monday, as trader/investor risk appetite is just a bit better to start the trading week. Also, crude oil prices have dropped sharply from last week’s 14-year highs, including Nymex crude at one point today dipping below $100.00 a barrel. That’s putting downside pressure on most of the raw commodity sector. April gold futures were last down $24.20 at $1,961.10 and May Comex silver was last down $0.785 at $25.38 an ounce.

Also negative for the safe-haven metals today, there is just a bit of optimism on de-escalating the Russia-Ukraine war, despite the fact it still raging in Ukraine. The U.S. and China are set to hold their first high-level talks since Russia’s invasion of Ukraine. The White House said National Security Adviser Jake Sullivan will meet in Rome Monday with China’s top diplomat, Communist Party Politburo member Yang Jiechi. U.S. officials say Russia has asked China for military aid for its war with Ukraine. That suggests Russian President Putin has faced more setbacks in the war than he anticipated. U.S. officials say they haven’t seen evidence Beijing has tried to circumvent sanctions on Russia. The thinking is that if China and the U.S. show a united front on opposing the war, Russia may de-escalate. However, others doubt Putin will back off and show weakness. Meantime, Russia and Ukraine are still meeting for talks, although there have been no major break-throughs despite notions some progress has been made.

Global stocks markets were mostly higher overnight. The U.S. stock indexes are mixed at midday but down from their daily highs.

In other news, China has locked down a major city, Shenzhen, which is a technology hub, due to Covid again spreading. Chinese stocks dropped on the news. That has also helped to put some price pressure on raw commodity markets to start the trading week.

The U.S. data point of the week will be the Federal Reserve’s FOMC meeting that begins Tuesday morning and ends Wednesday afternoon with a statement. It’s widely believed the Fed will raise its Fed funds rate by 0.25%.

The key outside markets see Nymex crude oil prices lower and trading around $102.00 a barrel. Crude prices have backed way off from last week’s 14-year high above $130.00. That suggests oil prices may have put in at least near-term tops. The U.S. dollar index is lower today. The benchmark U.S. 10-year Treasury note is presently yielding 2.115%. U.S. Treasury yields are on the rise. For perspective, the U.K. 10-year gild yield is presently 1.566% and the German 10-year bund is yielding 0.314%.

There was no major U.S. economic data released Monday.

Technically, gold bulls have the overall near-term technical advantage. Prices are in a six-week-old uptrend on the daily bar chart. However, recent price action suggests a market top is in place. Bulls' next upside price objective is to produce a close above solid 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 $1,900.00. First resistance is seen at $1,975.00 and then at today’s high of $1,994.80. First support is seen at today’s low of $1,952.00 and then at $1,935.00.

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