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More price pressure on gold, silver amid spiking bond yields

May 9, 2022

New York (May 9)   Gold and silver prices are solidly lower in early U.S. trading Monday, as rising bond yields are again hitting the precious metals. Silver futures prices hit a nearly five-month low today. A firmer U.S. dollar index that hit a 20-year high overnight is also bearish for the metals.June gold futures were last down $24.60 at $1,858.40 and May Comex silver was last down $0.63 at $21.685 an ounce.

Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward solidly lower openings when the New York day session begins. The S&P 500 and Nasdaq futures markets hit 12-month lows overnight. The U.S. stock index bears have the solid near-term technical advantage as prices are in downtrends on the daily bar charts.

A feature in the marketplace early this week is rising bond yields. The yield on the 10-year U.S. Treasury note is at a nearly four-year high and is presently fetching 3.180%. Traders and investors fear that global price inflation has gotten out of control. Historically, problematic price inflation is bearish for paper assets like stocks and bonds, and bullish for hard assets like raw commodities and real estate. Gold and silver traders are at present focusing on the bearish aspects of rising bond yields, but don’t be surprised at some point in the not-too-distant future to see that focus change to the bullish aspects of rapidly rising inflation.

Commodities at risk of reversing massive gains with 'wild run' similar to 2008, gold price to take on $2k – Bloomberg Intelligence

In overnight news, China’s trade numbers have withered amid the world’s second-largest economy dealing with major Covid lockdowns. China’s exports in April were up just 3.9% compared to a rise of 14.7% in March. The April figure was the lowest in two years. Imports were down 0.1% in April.

The key outside markets today sees Nymex crude oil futures prices solidly lower and trading around $107.50 a barrel. The proposed Russian oil ban by European Union countries is running into snags, reports said. Meantime, the U.S. dollar index is higher in early trading.

U.S. economic data due for release Monday includes the employment trends index and monthly wholesale trade data.


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