Still-hawkish Fed puts price pressure on gold, silver

(Kitco News) – Gold and silver prices are down in early U.S. trading Friday, in the aftermath of a U.S. monetary-policy-hawkish tone repeated by Federal Reserve Chairman Jerome Powell on Thursday afternoon. Technical selling pressure is also featured late this week as the near-term chart postures for both metals have deteriorated recently. December gold was last down $19.30 at $1,950.50. December silver was last down $0.38 at $22.525.

Fed Chairman Powell on Thursday afternoon again leaned hawkish in his comments at an IMF forum in Washington, D.C. He said, “If it becomes appropriate to tighten (U.S. monetary) policy further, we will not hesitate to do so.” Powell added, “We will continue to move carefully, however, allowing us to address both the risk of being misled by a few good months of data, and the risk of overtightening.” Bond yields and the U.S. dollar index rose following Powell’s comments, while gold sold off.

Asian and European markets were mostly weaker in overnight trading. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. Risk appetite is less keen heading into the weekend.

Reports overnight said China’s largest bank, ICBC, was hit with a major ransomware attack that could have impacted the U.S. Treasury market. The U.S. bond market sold off (yields rose) following a poorly received 30-year U.S. Treasury auction Thursday afternoon. It’s unclear, however, if the ransomware attack affected Thursday afternoon’s U.S. Treasury auction.  The U.S. financial services division of the Chinese bank was targeted, CNBC said. ICBC, also the world’s largest lender by assets, said Thursday its financial services arm experienced a ransomware attack “that resulted in disruption to certain” systems.

The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are higher and trading around $76.75 a barrel. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.644.

U.S. economic data due for release Friday is light and includes the University of Michigan consumer sentiment survey.  

Technically, the gold futures bulls have lost their slight near-term technical advantage and are fading. A price uptrend on the daily bar chart has been negated. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $2,000.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at the overnight high of $1,965.60 and then at $1,975.00. First support is seen at this week’s low of $1,948.30 and then at $1,935.00. Wyckoff’s Market Rating: 5.0

The silver bears have the overall near-term technical advantage. Silver bulls’ next upside price objective is closing December futures prices above solid technical resistance at the October high of $23.88. The next downside price objective for the bears is closing prices below solid support at $21.50. First resistance is seen at the overnight high of $22.80 and then at $23.00. Next support is seen at this week’s low of $22.375 and then at $22.00. Wyckoff’s Market Rating: 4.0.

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