Gold gains as global stock markets fade on U.S.-China strains
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(Kitco News) - Gold prices are posting decent gains in midday U.S. trading Monday, on safe-haven demand amid increasing U.S.-China tensions that threaten another trade war, or worse. June gold futures were last up $12.00 an ounce at $1,712.90. July Comex silver prices were last down $0.063 at $14.875 an ounce.
The U.S. is ratcheting up its rhetoric blaming China for delaying reporting of the coronavirus outbreak in its early stages, and even implying the virus could have come from a Wuhan laboratory. This escalation in U.S.-China tensions could thwart the partial trade agreement the world’s two largest economies reached in January. President Trump has threatened new trade tariffs and other sanctions could be levied against China.
Global stock markets were mostly down in overnight trading. U.S. stock indexes are mostly lower at midday. On the front burner of the market place this week is strained U.S.-China relations. The Covid-19 pandemic and its destructive impact on the global economy also continue in focus. Purchasing managers’ surveys from around the world, released Friday and Monday, show unprecedented contraction in that important sector of economies during the month of April. U.S. factory orders, reported on Monday, were down over 10% in April.
The European Central Bank on Monday forecast sharply lower economic growth and inflation for the bloc in 2020. The ECB sees Euro zone GDP down 5.5% and inflation at 0.4% in 2020. The ECB in January forecast inflation at 1.2% in 2020.
The important outside markets see Nymex crude oil prices firmer and trading around $20.25 a barrel in June futures. The U.S. dollar index is solidly higher today after the greenback bulls faded last week. The 10-year U.S. Treasury note yield is trading around 0.63% today.
Technically, June gold futures bulls have the firm overall near-term technical advantage amid a seven-week-old price uptrend still in place on the daily bar chart. Gold bulls' next upside near-term price objective is to produce a close above solid technical resistance at the April high of $1,788.80. Bears' next near-term downside price objective is pushing prices below solid technical support at $1,666.20. First resistance is seen at today’s high of $1726.00 and then at $1,737.00. First support is seen at $1,700.00 and then at last week’s low of 1,676.00. Wyckoff's Market Rating: 7.0
July silver futures bulls and bears are on a level overall near-term technical playing field. A four-week-old uptrend on the daily bar chart has been negated. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the April high of $16.30 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.00. First resistance is seen at today’s high of $15.225 and then at $15.50. Next support is seen at $14.75 and then at $14.56. Wyckoff's Market Rating: 5.0.
July N.Y. copper closed down 10 points at 231.15 cents today. Prices closed near the session high today. The copper bulls have the slight overall near-term technical advantage. Prices are in a six-week-old uptrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 250.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 221.70 cents. First resistance is seen at 235.00 cents and then at last week’s high of 239.50 cents. First support is seen at today’s low of 228.40 cents and then at 225.00 cents. Wyckoff's Market Rating: 5.5.