(Kitco News) – Gold and silver prices are firmly lower early Friday in the US. Gold prices hit another nearly 2.5-year low. Soaring government bond yields and a very strong US dollar are bearish factors that are currently punishing precious metals markets. October gold was last down $24.80 at $1,646.50 and December silver was down $0.532 at $19.08.

Global stock markets were mostly lower overnight. U.S. stock indexes point to consistently lower opens and three-month lows as the New York session begins. Risk aversion remained strong late this week after Russian President Putin said earlier this week that he would mobilize more troops to fight his war with Ukraine and also hinted that he could use his nuclear weapons if the integrity of Russia is threatened. Many experts say that Putin has been pushed into a corner and has become an even more dangerous man.

Don’t be surprised if gold prices make a solid rally by the end of today, leading to an uncertain weekend that sees global markets in turmoil and a Russian President widely seen as losing a war with a small country. Gold has a recent history of showing good strength when the market gets very rough.

Concerns about a US and/or global recession rose this week, following negative comments on the US economic outlook from Federal Reserve Chairman Jerome Powell on Wednesday and as major central banks tightened monetary policy this week. policies to curb rising inflation. In updated news, the UK has announced a major tax cut and spending deficits to try to jump-start its economy. That news helped boost global government bond yields. Meanwhile, eurozone manufacturing and services purchasing managers’ indexes fell in September and suggest a contraction in both sectors.

Key external markets today saw Nymex crude oil prices steadily lower, hitting a seven-month low and trading around $80.50 a barrel. The US dollar index is steadily higher and was pushed to another 20-year high in early US trading. Barron’s headline this morning is: “Dollar Crushes Rivals.” It is important to note that price trends in forex markets tend to be stronger and longer lasting than price trends in other markets. Thus, the rise of the dollar may continue for some time. Meanwhile, the yield on the 10-year US Treasury note is rising and is currently at 3.771% and an 11-year high. The yield on the 2-year Treasury bond is 4.205%.

The financial data of the U.S. due for release on Friday include the US flash service purchasing managers’ indexes.

Technically, October gold futures have the solid overall short-term technical advantage. Prices are in a downtrend on the daily bar chart. Bulls’ next upside price objective is to create a close above the firm resistance at $1,700.00. The Bears’ next short-term downside objective is to push futures prices below solid technical support at $1,600.00. First resistance is seen at the overnight high of $1,674.50 and then at this week’s high of $1,687.00. First support is seen at today’s low of $1,638.80 and then at $1,625.00. Wyckoff Market Rating: 1.0

September silver futures have the overall short-term technical advantage. Silver bulls’ next upside price target is a price close above the solid technical resistance at $20.00. The next bearish price objective for the bears is a price close below the solid support at $18.00. The first resistance appears at the overnight high of $19.745 and then at $20.00. The next support is seen at $19.00 and then $18.77. Wyckoff Market Score: 2.5.

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