Gold and silver pressured by strong U.S. dollar, rising bond yields

NEW YORK (Apr 15)  Gold and silver prices are lower in midday U.S. trading Thursday, on downside corrections following recent good gains. A higher U.S. dollar index that hit a two-year high and rising U.S. Treasury yields that this week hit three-year highs are bearish elements that worked against the precious metals market bulls on this day. June gold futures were last down $10.50 at $1,974.20 and May Comex silver was last down $0.425 at $25.605 an ounce.

Risk aversion is a bit keener heading into a long three-day holiday weekend for many countries and that may have somewhat limited selling pressure in the safe-haven metals today. Russian President Putin has again threatened NATO with his nuclear arsenal, saying he will deploy those weapons in and around the Baltic Sea if Sweden and Switzerland join the NATO alliance.

Surging Covid cases in China remain a serious concern for the overall global economy. Bloomberg today reports Chinese President Xi Jinping "sees no alternative to a zero-tolerance approach to Covid-19 despite simmering anger in the locked-down financial hub of Shanghai and mounting costs, telling officials yesterday they must adhere to the principle of people first and life first. The outbreak has Xi, who's likely to seek a third five-year term during a Communist Party congress later this year, facing one of the biggest tests of his tenure. For many of Shanghai's 25 million residents, the restrictions have meant resorting to bartering with neighbors for basic necessities like ice cream for vegetables or wine for cake."

Meantime, China's central bank appears set to lower interest rates and reduce the reserve requirement ratio for its banks. The moves would be intended to free up more liquidity in the banking sector to help bolster the economy which has been hit by the particularly bad wave of covid.

KITCO