Gold price powers to 12-mo. high on safe-haven buying
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(Kitco News) - Gold and silver prices are up in early U.S. trading Monday, with gold notching a 12-month high of $2,014.90, basis April Comex futures, and silver a six-week high. Safe-haven demand for the metals is featured amid a still shaky general marketplace amid the U.S. and European banking crisis. The technical charts are also bullish for gold and silver, which continues to invite chart-based speculators to the long sides. April gold was last up $13.20 at $1,986.60 and May silver was up $0.128 at $22.585.
Global stock markets were mixed to lower overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. Banking stocks across the globe are sinking, however. Risk aversion is again keener early this week. The Swiss banking firm UBS acquired Credit Suisse over the weekend to try to stabilize the European banking system, following the collapse of two big U.S. banks in early March. The move did little to boost trader and investor confidence. "There is a general sentiment that is trending increasingly negative," said one market analyst. Said noted investor Mark Grant on CNBC when asked about the banking crisis: "It's going to get worse. It's going to be messy."
The Federal Reserve's FOMC meeting begins Tuesday and concludes Wednesday afternoon. There is still some debate in the marketplace regarding whether the Fed will raise its main interest rate by 25 basis points or stand pat amid the U.S. and European banking crisis. Most market watchers, however, are leaning toward a 0.25% rate increase. The 0.5% rate hike by the European Central Bank last week makes a 0.25% increase by the FOMC more likely.
|Afraid of a Sunday bank failure, investors don't want to start the weekend without some gold, driving prices up more than 3%|
The key outside markets today see the U.S. dollar index lower. Nymex crude oil futures prices are lower, hit a 15-month low and are trading around $66.00 a barrel. The benchmark 10-year U.S. Treasury note yield is presently fetching 3.371% and is falling to start the trading week.
There is no major U.S. economic data due for release Monday.
Technically, the gold futures bulls have the solid overall near-term technical advantage. Bulls' next upside price objective is to produce a close in April futures above solid resistance at all-time high of $2,078.80. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at $2,000.00 and then at the overnight high of $2,014.90. First support is seen at the overnight low of $1,972.90 and then at $1,950.00. Wyckoff's Market Rating: 8.5
The silver bulls have the firm overall near-term technical advantage. Silver bulls' next upside price objective is closing May futures prices above solid technical resistance at $23.50. The next downside price objective for the bears is closing prices below solid support at $21.00. First resistance is seen at the overnight high of $22.855 and then at $23.00. Next support is seen at the overnight low of $22.38 and then at $22.00. Wyckoff's Market Rating: 6.5.