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Gold prices up on safe-haven bid amid rising China tensions

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(Kitco News) - Gold and silver prices are trading higher in early U.S. dealings Friday, on safe-haven buying after fresh developments in China have sapped investor and trader risk appetite heading into a long U.S. holiday weekend. June gold futures were last up $15.50 an ounce at $1,737.70. July Comex silver prices were last up $0.276 at $17.645 an ounce.

Global stock markets were also mostly lower in overnight trading. U.S. stock indexes are pointed toward lower openings when the New York day session begins. U.S.-China tensions remain high. A new geopolitical element thrown into the mix is China’s threat to impose new national security laws in Hong Kong to thwart protesters there. Hong Kong’s main stock index, the Hang Seng, saw its worst day in nearly five years Friday—down over 5%.

China began its most important political event of the year late this week, the National People’s Congress. At the meetings Friday, Chinese officials said they won’t issue guidance on 2020 economic growth, acknowledging the severe economic damage inflicted on the world’s second-largest economy. Chinese authorities also implied that any more monetary policy stimulus may not be in the works, suggesting more pain for Chinese consumers. This news spooked the global marketplace and helped to sink stock markets and the crude oil markets overnight.

In other news, the Covid-19 pandemic is seeing an alarming rise of cases in some countries, while North America and Europe appear to be “flattening the curve” of the rate of infections.

The important outside markets see the U.S. dollar index solidly up early today on safe-haven demand. Nymex crude oil prices are sharply lower and trading around $32.50 a barrel. The yield on the benchmark U.S. Treasury 10-year note is currently around 0.67%.  

There is no major U.S. economic data due for release Friday.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls have the solid overall near-term technical advantage amid an uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at the April high of $1,788.80. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,666.20. First resistance is seen at the overnight high of $1,742.00 and then at $1,750.00. First support is seen at this week’s low of $1,715.30 and then at $1,700.00. Wyckoff's Market Rating: 7.5

Live 24 hours silver chart [ Kitco Inc. ]

July silver futures bulls have the solid overall near-term technical advantage with the recent big gains. Silver bulls' next upside price objective is closing prices above solid technical resistance at the February high of $19.07 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.50. First resistance is seen at $18.00 and then at this week’s high of $18.165. Next support is seen at the overnight low of $17.19 and then at $17.00. Wyckoff's Market Rating: 7.5.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.