🔽 Precious metals sink as yields resume climb
Silver prices are taking a dive at the beginning of a new week. While declines can be spotted all across the precious metals market today, silver is a clear underperformer among the group with an over-2% drop at press time. Gold is down 0.8%, platinum drops 0.5% and palladium is down 1%. End of the quarter did not bring an end to sell-off on the bond market and Treasuries remain under pressure during the first trading day of October. As a result, yields continue to climb with 10-year US Treasury yield climbing 6 basis points today, to 4.63%. This is a fresh multi-year high and suggests that pull back in yields that we have observed in the second half of the previous week was just a correction, most likely triggered by some safer repositioning for a potential but rather improbable US government shutdown risk. As shutdown was avoided with 45-day stopgap bill, sell-off on the bond market resumed.
Taking a look at SILVER chart at D1 interval, we can see that a big gains that the commodity was making during Friday was completely erased before the session end and SILVER dropped below a key mid-term support zone in the $22.40 per ounce area, where the upward trendline was also located. . A point to note is that bulls failed in the $23.40 area, where 50- and 200-session moving average can be found, which is an important technical signal. Technical picture is becoming more and more bearish. However, there is one more important support ahead - lower limit of the Overbalance structure at $21.35 per ounce - and a break below it would be another confirmation of a bearish trend reversal.
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Source: xStation5
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