(Kitco News) - Gold prices are solidly up, with June Comex futures hitting another contract/record high of $2,287.50 an ounce, in early U.S. trading Monday. Silver prices are also posting sharp gains. Safe-haven demand is featured today as geopolitical tensions in the Middle East have ratcheted up. June gold was last up $21.90 at $2,279.90. May silver was last up $0.532 at $25.61.
An air strike on the consular part of Iran’s embassy in Damascus, Syria, killed three senior members of Iran’s Revolutionary Guards. Iran blamed Israel for the strike. This is another escalation in the already-turbulent Middle East. Also, an Israeli air strike in Gaza killed seven innocent aid workers, stoking further global concerns about Israel’s aggressive offensive in Gaza.
Asian and European stock indexes were mixed but mostly firmer overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins.
Featured in the marketplace early this week is rising U.S. Treasury yields following recent strong U.S. economic data, including Monday’s stronger-than-expected ISM manufacturing report. That has given the U.S. monetary policy doves pause on their notions of an interest rate cut coming as early as June.
In other news, the Japanese yen sank to a 34-year low against the U.S. dollar today. Reads a DowJones Newswires headline today: “Yen intervention risk is rising, but effects could be short-lived.”
The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are higher, hit a five-month high, and are trading around $85.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 4.34%--the highest this year.
U.S. economic reports due for release Tuesday include the Johnson Redbook weekly retail sales report, manufacturers’ shipments and inventories, the JOLTS survey, the global manufacturing PMI, and domestic auto industry sales. Several Federal Reserve officials are also slated to speak today.
Technically, the gold futures bulls have the strong overall near-term technical advantage. A six-week-old uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $2,300.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,200.00. First resistance is seen at the overnight contract high of $2,287.50 and then at $2,300.00. First support is seen at the overnight low of $2,267.10 and then at this week’s low of $2,249.10. Wyckoff's Market Rating: 9.0.
The silver bulls have the firm overall near-term technical advantage. Bulls are working to revive a six-week-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing May futures prices above solid technical resistance at the March high of $25.975. The next downside price objective for the bears is closing prices below solid support at $24.00. First resistance is seen at the overnight high of $25.865 and then at $25.975. Next support is seen at the overnight low of $25.195 and then at $25.00. Wyckoff's Market Rating: 6.5.
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