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Price pressure on gold and silver as bond yields on the rise

April 28, 2021

New York (Apr 28)  Gold and silver prices are solidly lower in early U.S. trading Wednesday, on some profit taking from the shorter-term futures traders after recent gains, and as U.S. Treasury bond yields are on the rise again. A firmer U.S. dollar index at mid-week is also an bearish element for metals markets today. June gold futures were last down $14.40 at $1,764.70 and July Comex silver was last down $0.52 at $25.93 an ounce.

Global stock markets were mixed to mostly firmer overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. It’s a big day for markets Wednesday. The data point of the week is the conclusion of the Federal Reserve’s Open Market Committee (FOMC) meeting that began Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chair Powell. While no change in U.S. monetary policy is expected, the marketplace will closely scrutinize the Fed’s inflation outlook and any comments on the future path of monetary policy. Also, President Biden today is set to lay out to a joint session of Congress another big government spending program in order to continue to pry the U.S. economy away from the grip of the pandemic. Biden’s $1.8 trillion "American Families Plan" includes $1 trillion in spending and $800 million in tax cuts and credits for middle- and lower-income American families. The 10-year plan would be part funded by increased taxes and wealthy Americans.

The key outside markets today see the US dollar index firmer. Nymex crude oil prices are higher and trading around $63.15 a barrel. Meantime, the yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.64%. Bond yields are on the rise again at mid-week.  

Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the advance economic indicators report and the weekly DOE liquid energy stocks report.

Live 24 hours gold chart [Kitco Inc.]

Technically, June gold futures bulls have the overall near-term technical advantage. However, they need to show fresh power soon to keep alive a price uptrend in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,723.20. First resistance is seen at the overnight high of $1,776.80 and then at this week’s high of $1,785.90. First support is seen at $1,760.00 and then at 1,750.00.


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