Gold and Silver Prices Decline
Gold and silver prices are down in early U.S. trading on Friday, following a U.S. monetary-policy-hawkish tone repeated by Federal Reserve Chairman Jerome Powell. Technical selling pressure is also featured as the near-term chart postures for both metals have deteriorated recently.
December gold is currently trading at $1,950.50, down $19.30, while December silver is trading at $22.525, down $0.38.
Fed Chairman Powell’s Hawkish Comments
Fed Chairman Powell leaned hawkish in his comments at an IMF forum in Washington, D.C. He stated that if it becomes appropriate to tighten U.S. monetary policy further, they will not hesitate to do so. Powell emphasized the importance of moving carefully to address both the risk of being misled by data and the risk of overtightening.
Following Powell’s comments, bond yields and the U.S. dollar index rose, resulting in a sell-off in gold. Asian and European markets were also weaker in overnight trading. U.S. stock indexes, however, are expected to open slightly higher.
ICBC Hit with Ransomware Attack
Reports overnight indicated that China’s largest bank, ICBC, was hit with a major ransomware attack, possibly impacting the U.S. Treasury market. The U.S. bond market sold off after a poorly received 30-year U.S. Treasury auction. It remains unclear if the ransomware attack affected the auction.
The U.S. financial services division of ICBC was targeted in the attack, causing disruptions to certain systems. ICBC, the world’s largest lender by assets, confirmed the ransomware incident.
Market Outlook
The U.S. dollar index is slightly lower, while Nymex crude oil prices are higher at around $76.75 a barrel. The yield on the benchmark U.S. Treasury 10-year note is currently at 4.644.
Today’s economic data release is light and includes the University of Michigan consumer sentiment survey.
Technical Analysis
Gold futures have lost their slight near-term technical advantage and are fading. The price uptrend on the daily bar chart has been negated. The next upside price objective for the bulls is to produce a close in December futures above solid resistance at $2,000.00. On the downside, the bears’ next near-term price objective is to push futures prices below solid technical support at $1,900.00.
Silver futures continue to favor the bears in the overall near-term technical outlook. The next upside price objective for the bulls is to close December futures prices above solid technical resistance at $23.88. On the downside, the bears’ next price objective is to close prices below solid support at $21.50.
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