Gold, silver soar as safe-haven buyers gain more confidence
(Kitco News) - Gold and silver prices are trading sharply up in midday U.S. trading Monday, as the global marketplace has seen in significant uptick in sentiment to start the trading week, on reports the coronavirus outbreak may be de-escalating. This somewhat encouraging news appears to be a goldilocks scenario for gold and to a lesser degree silver, as buyers are more confident to step in and purchasing the safe-haven metals, while knowing there are still very tough times ahead, including the specter of problematic inflation farther down the road. June gold futures were last up $46.10 an ounce at $1,692.20. May Comex silver prices were last up $0.561 at $15.045 an ounce.
Global stock markets were mostly higher in overnight trading. U.S. stock indexes are solidly higher at midday. The coronavirus outbreak that has crippled the global economy appears to be de-escalating a bit, according to some models that forecast the peak number of cases and deaths. However, the coming week is going to be “our Pearl Harbor moment, our 9/11 moment,” said U.S. Surgeon General Jerome Adams, regarding an expected wave of coronavirus deaths across the U.S. New York City, the U.S. Covid-19 epicenter, New Orleans and Detroit face especially tough days ahead.
The debate in the coming days, especially if the Covid-19 outbreak starts to de-escalate, will be when to restart the global economies. Traders and investors are also handicapping then the world economies will get back to full speed when they do start back up in earnest. There are complicated supply chains that have been severely disrupted the past few weeks.
Reports say the U.S. Treasury market and short-term securities market are operating more smoothly than a couple weeks ago, following the Federal Reserve’s massive injection of liquidity into those markets.
The important outside markets today see Nymex crude oil prices lower and trading around $26.60 a barrel. There are reports that Russia and Saudi Arabia are close to a deal to cut their crude oil production levels, following pressure by President Trump to do so. OPEC officials were scheduled to meet today via a conference call to discuss production cuts, but that meeting has been moved to Thursday. The U.S. dollar index is slightly higher this morning as the bulls have regained power. The 10-year U.S. Treasury note yield is trading around 0.65% Monday morning, up from Friday’s levels.
Technically, June gold futures bulls have the solid overall near-term technical advantage and gained more power today. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the March high of $1,707.80. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,625.00. First resistance is seen at today’s high of $1,696.00 and then at $1,700.00. First support is seen at $1,675.00 and then at $1,650.00. Wyckoff's Market Rating: 8.0
May silver futures hit a three-week high today. The silver bulls have regained the overall near-term technical advantage. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $16.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $13.50. First resistance is seen at $15.20 and then at $15.50. Next support is seen at today’s low of $14.355 and then at $14.00. Wyckoff's Market Rating: 6.0.
May N.Y. copper closed up 215 points at 221.40 cents today. Prices closed nearer the session high today on short covering. The copper bears still have the overall near-term technical advantage. A bearish pennant pattern has formed on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 230.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the March low of 197.25 cents. First resistance is seen at last week’s high of 224.80 cents and then at 228.00 cents. First support is seen at today’s low of 218.20 cents and then at last week’s low of 213.55 cents. Wyckoff's Market Rating: 3.0.