Gold, Silver Prices Drop On Higher U.S. Dollar, Better Risk Appetite

New York (Mar 28)  Gold and silver prices were solidly lower in midday U.S. trading Wednesday. A rebound in the U.S. dollar index at mid-week and an uptick in investor risk appetite today had the sellers of the metals in control. April Comex gold futures were last down $15.60 an ounce at $1,326.40. May Comex silver was last down $0.276 at $16.265 an ounce.

While world stock markets were mostly lower overnight, after the U.S. stock indexes took a downside hit Tuesday, the U.S. indexes stabilized at midday today. However, world stock markets have become wobbly again. There are mounting technical clues the U.S. stock indexes have put in major tops. Such would be a longer-term bullish development for the gold and silver markets, which are a competing asset class with equities.

Today’s final revision of the four-quarter U.S. gross domestic product showed a rise of 2.9% on an annual basis, which beat market expectations for a growth rate of 2.7% and was better than the last estimate for the fourth quarter, which showed a rise of 2.5%. Today’s rise in 4Q GDP compares with a rise of 3.2% in the third quarter and a gain of 3.1% in the second quarter of 2017. Economists are optimistic U.S. GDP growth can remain above 3.0% in 2018, due to corporate tax cuts adding to an already strengthening U.S. economy.

The key “outside markets” on Wednesday saw the U.S. dollar index solidly higher. Trading in the USDX has been choppy recently, but the near-term price trend remains sideways to lower. Meantime, Nymex crude oil prices were down on more profit taking from recent gains, and trading just above $64.00 a barrel.

Technically, April gold futures bulls still have the slight overall near-term technical advantage, but are fading and need to show fresh power soon to keep it. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,356.80. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,300.00.

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