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Gold, Silver Hit 5-Mo. Highs Amid Weaker U.S. Dollar, Bullish Technicals

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(Kitco News) - Gold and silver prices ended the U.S. day session higher and scored five-month highs Thursday. The gold market continues to see an updraft from safe haven demand amid a rise in geopolitical tensions. A slide in the U.S. dollar index this week also favors the precious metals market bulls. The near-term chart postures for gold and silver have turned more bullish this week, and that’s inviting more technical buyers. June Comex gold was last up $10.50 an ounce at $1,288.50.May Comex silver was last up $0.255 at $18.555 an ounce.

Heightened geopolitical risks are still on the front burner of the world marketplace. A meeting between the U.S. secretary of state and Russia’s foreign minister ended Wednesday without agreement and likely pushed the two sides deeper into divisiveness. Secretary of State Rex Tillerson said Russia and the U.S. just don’t trust each other. And during a press conference on Wednesday afternoon Trump said U.S. relations with Russia are “bad.” Trump at the same time praised Chinese leader Xi Jinpin. That move could have been calculated by Trump, as he appeared to suggest a warming relationship with China and its third-strongest military in the world, and one that has the most influence over North Korea. The U.S. Navy has warships headed for waters off the Korean peninsula. Trump also said he is not going to name China as a currency manipulator—likely in exchange for China doing some arm-twisting on North Korea.

It was just announced Thursday the U.S. dropped its biggest non-nuclear bomb on ISIS terrorists in Afghanistan recently. That’s the first time this bomb has ever been used, other than in testing. It’s likely a calculated message from Trump to all actors in the world who want to do the U.S. harm. I mentioned at the beginning of the year that geopolitics will be more of a markets-mover in 2017 than in recent years. Such is proving to be the case with a more militarily hawkish U.S. president.

Late Wednesday afternoon the Wall Street Journal released an interview with President Trump, in which he said the thinks the value of the U.S. dollar is too strong and that U.S. interest rates should remain low. This news caught the markets off guard. The U.S. dollar index sunk, gold and U.S. Treasuries rallied and the U.S. stock market sold off. Trump appears to now be siding with Fed Chair Janet Yellen, after he ostensibly said he would like to fire her when he was campaigning last fall.

The key outside markets on Thursday saw the U.S. dollar index trading lower following Trump’s negative remarks on the greenback. The greenback bulls still have the slight overall near-term technical advantage, but are fading. Meantime, Nymex crude oil prices were slightly lower. Data from the U.S. shows oil production continues to rise. The crude oil bulls still have the overall near-term technical advantage.

(Note: Follow me on Twitter--@jimwyckoff--for breaking market news.)

Live 24 hours gold chart [Kitco Inc.]

Technically, June gold futures prices closed nearer the session high and hit another five-month high today. Prices this week have pushed above the key 200-day moving average, which is also bullish. The gold bulls have the overall near-term technical advantage. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at this week’s low of $1,248.20. First resistance is seen at today’s high of $1,290.70 and then at $1,300.00. First support is seen at today’s low of $1,283.80 and then at 1,275.00. Wyckoff's Market Rating: 6.5

Live 24 hours silver chart [ Kitco Inc. ]

May silverr futures prices closed near mid-range and hit a five-month high today. The silver market bulls have the overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $19.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.50. First resistance is seen at today’s high of $18.605 and then at $18.75. Next support is seen at $18.245 and then at $18.00. Wyckoff's Market Rating: 6.5.

May N.Y. copper closed up 235 points at 256.80 cents today. Prices closed near mid-range on short covering after hitting a three-month low on Wednesday. The copper bears have the slight overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 271.70 cents. The next downside price objective for the bears is closing prices below solid technical support at the December low of 245.60 cents. First resistance is seen at today’s high of 258.90 cents and then at 260.00 cents. First support is seen at this week’s low of 253.45 and then at 250.00 cents. Wyckoff's Market Rating: 4.5.

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