Gold Prices Get Good Safe-Haven Bid As Global Stocks Sell Off
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(Kitco News) - Gold prices are posting double-digit gains and have pushed back above $1,300.00 in early-morning U.S. trading Friday. Safe-haven demand is in play on this last trading day of the week and of the month, as world equity markets wobble. June gold futures were last up $11.10 an ounce at $1,303.50. July Comex silver prices were last up $0.009 at $14.495 an ounce.
European and Asian stock markets sold off overnight as trader and investor anxiety has up-ticked late this week. U.S. stock indexes are also pointed toward solidly lower openings when the New York day session begins and hit three-month lows overnight.
President Trump late Thursday surprisingly announced new trade tariffs set to go into effect in June against imports from Mexico, in order to persuade that country to help the U.S. battle illegal immigration from the Mexican border with the U.S.
To further rattle the markets, there was more dour economic news coming out of China today. Its manufacturing purchasing managers index (PMI) for May came in at 49.4 versus 50.1 in April and a 49.9 forecast. China’s May services PMI was 54.3, the same as in April and in line with market expectations. A reading below 50.0 suggests contraction in the sector, while a number above suggests growth.
The above news developments underscore a recent theme in the marketplace: increasing concerns regarding slowing global economic growth.
U.S. Treasury prices are also rallying on safe-haven demand amid the global stock market sell off.
The key “outside markets” today see the U.S. dollar index trading modestly down. Meantime, Nymex crude oil prices are lower, hit a 3.5-month low overnight and are trading around $55.50 a barrel.
U.S. economic data due for release Friday includes personal income and outlays, the ISM Chicago business survey, and the University of Michigan consumer sentiment survey.
Technically, the gold bulls and bears are back on a level overall near-term technical playing field. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $1,320.00. Bears' next near-term downside price breakout objective is pushing August futures prices below solid technical support at the May low of $1,273.20. First resistance is seen at the May high of $1,310.10 and then at $1,320.00. First support is seen at the overnight low of $1,292.50 and then at $1,285.00. Wyckoff's Market Rating: 5.0
July silver futures bears have the solid overall near-term technical advantage. Prices are in a three-month-old downtrend on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $15.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the November low of $14.175. First resistance is seen at last week’s high of $14.635 and then at $14.75. Next support is seen at this week’s low of $14.265 and then at $14.175. Wyckoff's Market Rating: 2.0.