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(Kitco News) – Gold and silver prices are sharply higher in early U.S. trading Thursday. Gold hit a 1.5-year high and silver a seven-month high. Safe-haven demand is featured amid a keen risk-off trading day in the marketplace, as Russia has unleashed a major military attack on its neighboring country, Ukraine. April gold futures were last up $56.90 at $1,967.20 and March Comex silver was last up $0.872 at $25.425 an ounce.
Russia initiated a full-blown invasion of Ukraine Thursday, including bombing and missile strikes on key infrastructure and defense installations all over Ukraine. Russian President Putin claimed the attack is an effort to demilitarize Ukraine. Global stock markets sunk sharply on the news, including the U.S. stock indexes. Many major commodity markets saw their prices soar. Russia is a major raw commodity exporter, and Russia and Ukraine are major grain exporters. Nymex and Brent crude oil futures pushed above $100.00 a barrel, with Nymex oil hitting $100.54 a barrel as of this writing. Grain futures rocketed sharply higher and set multi-year highs in some markets. The U.S. dollar index appreciated sharply and U.S. Treasury yields dropped dramatically. Bitcoin, seen by some as a safe-haven asset, once again sold off sharply when the going in the marketplace gets really tough.
A news headline from Barrons today read, “Russia has actually invaded Ukraine; markets are not ready for that fallout.” The extreme price moves seen in many markets today bear out that notion.
So far, the West and NATO nations have not participated in defending Ukraine with their militaries. However, in the fog of war major mistakes can be made by armies and their leaders. Much of the world is hoping the West and NATO do not get sucked into this conflagration.
All of the above developments make the other worry in the marketplace even greater: rising inflation. That’s also bullish for the metals markets. The keen marketplace uncertainty and anxiety may well impact the timing of the Federal Reserve’s plans to raise U.S. interest rates. Falling U.S. Treasury yields and potential slowing global economic growth due to the Russia-Ukraine war, and sharply rising energy prices, risk the Fed and other central banks pushing their economies into recession if they raise interest rates too aggressively. A Dow Jones Newswires news headline Thursday morning read, “Russian invasion scrambles prospects for global economy.”
The key outside markets today see Nymex crude oil prices posting big gains and trading around $99.50 a barrel. The U.S. dollar index is sharply higher and hit a three-week high today. The benchmark U.S. 10-year Treasury note is presently yielding 1.875%, well down from over 2.0% seen earlier this month.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Chicago Fed national activity index, the second estimate of fourth-quarter gross domestic product, new residential sales, the Kansas City Fed manufacturing survey, and the weekly DOE liquid energy stocks report.
Technically, the April gold futures bulls have the strong overall near-term technical advantage and gained more power today. Prices are trending up on the daily bar chart. Bulls’ next upside price objective is to produce a close in April futures above major 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 $1,976.50 and then at $2,000.00. First support is seen at $1,950.00 and then at $1,925.00. Wyckoff’s Market Rating: 9.0
March silver futures bulls have the firm overall near-term technical advantage and gained more power today. Prices are in an uptrend on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $26.00 an ounce. The next downside price objective for the bears is closing prices below solid support at this week’s low of $23.71. First resistance is seen at the overnight high of $25.67 and then at $26.00. Next support is seen at $25.00 and then at the overnight low of $24.55. Wyckoff’s Market Rating: 6.5.
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