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(Kitco News) – Gold and silver prices declined at noon in the US on Tuesday following unexpected remarks by US Treasury Secretary and former Federal Reserve Chairman Janet Yellen, who said US interest rates might need to be raised. Today, at the beginning of trading, prices for gold and silver reached a nine-week high. Also a negative factor for precious metals on this day is the rebound in the US dollar index. June gold futures last fell $ 15.5 to $ 1,776.30, and July Comex silver fell $ 0.53 to $ 26.41 an ounce.
Speaking at a webinar hosted by The Atlantic, Yellen warned that interest rates may need to be raised to keep the US economy from overheating. “It may be that interest rates will need to rise slightly to keep our economy from overheating, even if the additional costs are relatively small compared to the size of the economy,” she said in a presentation, catching the market by surprise. What’s surprising is that Yellen’s comments seem to contrast with recent statements by incumbent Fed Chairman Jerome Powell that US interest rates are unlikely to rise anytime soon. Yellen’s remarks today were surprising to most, but they seem logical to many seasoned market watchers, including this one, who has for some time argued that there were too many “burned irons” for easy money not to cause overheating. The US economy and the outlook for problematic price inflation. Many commodity prices hit multi-year highs and sawnwood prices soared to all-time highs. The growth trajectory of US government bond yields has also fueled speculation on inflation, which could get hotter than central banks and governments want to see.
World stock markets remained virtually unchanged the day before. US stock indices are declining at noon. With no major geopolitical fires currently in place and the suppression of Covid-19 in most major economies, traders and investors have largely focused on upbeat quarterly corporate earnings reports and the still simple monetary policy of the world’s major central banks. These are optimistic elements for the stock markets. However, Yellen’s hawkish comments on Tuesday could play a pivotal role in pushing up the stock market – at least for a while.
In news overnight, Australia’s central bank left its monetary policy unchanged at its regular meeting on Tuesday. The Royal Bank of Australia has said it does not expect interest rate hikes until at least 2024. The RBA did not portray inflation as a problem.
Key foreign markets are seeing growth in the US dollar index today. Crude oil prices rose on the NYMEX to hit a six-week high of about $ 65.60 a barrel. Meanwhile, the yield on 10-year US Treasuries is currently around 1.62%. For comparison, the 10-year German bond yield is -0.192%, while the UK bond is 0.837%.
Technically, bulls in June gold futures have little overall short-term technical advantage as the four-week uptrend on the daily bar chart has resumed. The next target for the bulls is to close above the solid resistance at $ 1,800.00. The next short-term target for the bears is to bring futures prices below the solid technical support at $ 1,750.00. The first resistance will be at $ 1,790 and then at $ 1,800. First support is seen at this week’s low of $ 1,765.60 and then at last week’s low of $ 1,754.60. Wyckoff Market Rating: 5.5
The bulls in July silver futures have an overall short-term technical edge. The uptrend of five weeks ago has resumed on the daily histogram. The next upside target for silver is to close above the solid technical resistance at $ 28.00 an ounce. The next downside target for bears is to close below the solid support at last week’s low of $ 25,745. The first resistance is seen at around $ 26.765, and then at around $ 27.00. Next support is seen at $ 26, followed by $ 25.85 at this week’s low. Wyckoff Market Rating: 6.0.
Copper in July in New York closed up 40 points to 453.30 cents today. Today prices closed closer to the session high and closed at the contract level and almost 10-year high. Copper bulls have a strong overall short-term technical advantage. The next bullish target for copper is to push prices to close above the solid technical resistance at 460.00 cents. The next downside target for the bears is closing prices below the solid technical support at 420.00 cents. The first resistance occurs at the contract high of 455.10 cents and then at 460.00 cents. First support is seen at this week’s low at 443.50 cents and then at 440.00 cents. Wyckoff Market Rating: 9.0.
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