Gold, Silver Sharply Up On Safe-Haven Buying, Inflation Worries

(March 24th, 2022 - Jim Wyckoff)

(Kitco News) - Gold and silver prices are are sharply higher in midday U.S. trading Thursday, as safe-haven demand is featured amid marketplace risk aversion that remains elevated amid the Russia-Ukraine war. Sharp gains in crude oil prices this week are also bullish for the metals markets, even though oil prices backed off today. April gold futures were last up $26.70 at $1,964.00 and May Comex silver was last up $0.736 at $25.925 an ounce.

The Russia-Ukraine war and its widespread market implications continue on the front burner. President Biden Thursday is meeting with NATO and EU leaders to discuss the war. The two-day summit will be held at NATO headquarters in Brussels.

There are some reports surfacing that Russian President Putin’s war is producing cracks in the Kremlin. The reports said the Russian central bank chief quit and has left the country, while another official wanted to resign but Putin would not allow it.

Reports said Russia’s stock market has partially reopened and was trading higher, but foreigners have been banned from selling.

The other element impacting the marketplace is inflation, which has intensified because of the war. Rising inflation is historically bullish for metals markets. Global bond market yields have been rising sharply recently, with U.S. Treasury yields nearing three-year highs. The U.S. 2-year and 10-year yield curve is very close to inverting, which would begin to suggest a U.S. economic recession.

The key outside markets see Nymex crude oil prices down and trading around $112.00 a barrel. The U.S. dollar index is firmer today. The benchmark U.S. 10-year Treasury note is presently yielding 2.3%.

Technically, April gold futures prices hit a two-week high today and saw a bullish upside breakout from the recent sideways trading range. Bulls have the firm overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the March low of $1,895.20. First resistance is seen at $1,976.50 and then at $1,985.00. First support is seen at  today’s low of $1,937.40 and then at $1,925.00. Wyckoff's Market Rating: 7.0

May silver futures prices hit a two-week high. The silver bulls have the firm overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the March high of $27.495 an ounce. The next downside price objective for the bears is closing prices below solid support at $24.55. First resistance is seen at today’s high of $26.16 and then at $26.50. Next support is seen at $25.50 and then at today’s low of $25.17. Wyckoff's Market Rating: 7.0.