Gold, Silver Prices Weaker On Profit Taking, Firmer USDX

New York (March 27)  Gold and silver prices are modestly down in early-afternoon U.S. trading Wednesday. Some mild profit-taking pressure from recent gains and a firmer U.S. dollar index on this day helped to pressure the precious metals markets. Still, losses were limited today by some safe-haven buying interest amid a bit more risk aversion in the world marketplace at mid-week. April gold futures were last down $3.50 an ounce at $1,311.50. May Comex silver was last down $0.114 at $15.315 an ounce.

Asian and European stock indexes were mostly down overnight. U.S. stock indexes are weaker at midday today. There is some elevated risk aversion in the world marketplace at mid-week, mainly due to worries about slowing global economic growth.

The German government today auctioned its 10-year note (bund) for an average yield of -0.05% versus a yield of 0.12% for bunds auctioned on Feb. 27, and the first negative yield since 2016. A feature in the marketplace recently has been falling government bond yields in the major industrialized countries. U.S. Treasury yields briefly inverted last week when the short-term 3-month note yield moved above the 10-year note yield. Today, U.S. T-Bond and T-Note futures prices hit contract highs.

There was more weak economic data coming out of China today, as its industrial profits for the first two months of this year dropped by 14%--the biggest drop since 2011. Lower factory gate prices and lower sales were blamed. U.S. tariffs on China’s imports into the U.S. are also likely to blame. The U.S. and China continue high-level trade negotiations beginning Thursday.

The other key outside market today sees Nymex crude oil prices are weaker and trading around $59.50 a barrel.

Technically, April gold futures prices closed nearer the session low. The bulls still have the firm overall near-term technical advantage. A three-week-old uptrend is in place on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,331.10. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,300.00.

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