ProShares Ultra Gold

UGL

Market cap $809M

Spot gold and silver prices are sharply lower after the close Wednesday, as crude oil rallied, Treasury yields rose and renewed U.S.-Iran fighting pressured non-yielding metals.

Gold is testing key long-term support as bearish momentum builds, with downside targets emerging, while only a reclaim of short-term resistance would signal stabilization.

After March saw central banks flip to net sellers of gold, the sovereign sector switched back to bullion purchases in April, according to the latest data from the World Gold Council (WGC).“Central banks resumed net gold purchases in April, having bought 17t,” wrote Marissa Salim, the WGC Senior Research Lead, APAC.

Precious metals are under strong pressure as traders bet on hawkish central banks.

One day after a bombshell report from Bloomberg claimed the Reserve Bank of India (RBI) sold gold reserves worth roughly $12 billion in the two weeks through May 22, the central bank issued a firm denial.The RBI said in a statement on Wednesday that its physical stocks ​of the precious metal remain unchanged at 880.52 tonnes.

Kinross Gold Corp (NYSE:KGC) was last seen down 2.8% at $28.18, pulling back alongside the broader precious metals sector.

Rising expectations that the Federal Reserve will have to hike interest rates rather than cut them by the end of the year continue to take their toll on the precious metals market, with gold prices falling below $4,500 an ounce on Wednesday.

The U.S. service sector improved above expectations last month, according to the latest data from the Institute for Supply Management (ISM).The ISM announced on Wednesday morning that its Services Purchasing Managers Index came in at 54.5 in May, up from 53.6 in April. The data was better than expected, as economists were looking for a reading of 53.8.

Gold prices face pressure as rising Treasury yields, a stronger dollar, and Fed hike fears grow. Friday's NFP report could determine the next move.

Gold drifts a little bit lower early on Wednesday, as traders continue to see a consolidation range play out. The noise coming out of the Middle East continues to be a concern in this market.