Secure Demand Lifts Gold Prices


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(Kitco News) – Gold and silver prices rose sharply Monday, with gold hitting a four-week high in early U.S. trading, on the back of secure-haven demand amid a tense marketplace. April gold was last up $25.70 at $1,892.70 and May silver was up $0.669 at $21.18.

Investors and traders have been on edge since the weekend, following the late-week collapse of Silicon Valley Bank, the sixteenth largest bank in the U.S. The federal government has guaranteed all depositors in the failed bank. Other smaller U.S. banks are reported to be facing difficulties as depositors withdraw their funds. In addition, Signature Bank, which serves many crypto-currency companies, has been taken over by government regulators.

The seriousness of the situation was underscored by a Goldman Sachs prediction that the Federal Reserve will not increase U.S. interest rates at its FOMC meeting next week. According to one market analyst quoted by the Wall Street Journal, “When the Fed raises rates so quickly, nine times out of 10, it breaks things. We may see more corporate failures; we may see more regional banks go under.” The headline in Dow Jones Newswires read “Bank mayhem is now on the Fed’s radar.”

Global stock markets were mostly lower overnight, and U.S. stock indexes are likely to open slightly mixed in the New York session.

U.S. Treasury prices have gone up (yields down) due to flight-to-quality buying, while Bitcoin prices have jumped sharply. The fear in the marketplace is that this could become a contagion effect and trigger a crisis of confidence among investors and the general public. The next two days will be critical in assessing the level of stress.

The key outside markets today see the U.S. dollar index lower after hitting a three-month high last week. Nymex crude oil futures prices are lower and trading around $75.25 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently at 3.549%, after poking above the 4.0% level.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold futures bulls have the firm overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at the February high of $1,975.20. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the February low of $1,810.80. First resistance is seen at $1,900.00 and then at $1,915.00. First support is seen at the overnight low of $1,875.70 and then at $1,864.40. Wyckoff’s Market Rating: 7.0

Live 24 hours silver chart [ Kitco Inc. ]

The silver bears have the overall near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. Silver bulls’ next upside price objective is closing May futures prices above solid technical resistance at $22.00. The next downside price objective for the bears is closing prices below solid support at the March low of $19.945. First resistance is seen at $21.39 and then at $21.80. Next support is seen at the overnight low of $20.645 and then at $20.505. Wyckoff’s Market Rating: 3.5.

Disclaimer: The opinions expressed in this article are those of the author and may not correspond to those of Kitco Metals Inc. The author has made every effort to guarantee the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. It does not constitute a solicitation to exchange commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article shall not be held responsible for any losses and/or damages arising from the use of this publication.

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