(Kitco News) - Gold prices are solidly higher and hit new record highs in early U.S. trading Tuesday. Silver futures are also posting good gains. Persistent safe-haven demand amid heightened concerns over a global trade war, new geopolitical developments, bullish charts and notions of an easier Federal Reserve monetary policy are fueling the powerful bull market run in gold. April gold was last up $28.10 at $3,034.20. May silver prices were last up $0.447 at $34.755.
Israel launched airstrikes across the Gaza Strip early Tuesday, killing at least 400 Palestinians, including women and children, according to hospital officials. The surprise bombardment shattered a ceasefire in place since January and threatened to fully reignite the 17-month-old war. Over the weekend the U.S. attacked Houthi targets in the Middle East and vowed more strikes.
Broker SP Angel today reported in an email dispatch: “The fragmentation of the past 20 years of globalization is likely a key theme in this gold bull run. This was triggered by sanctions imposed upon Russia, prompting diversification away from U.S. dollar-denominated foreign reserve holdings. This has been reflected in a doubling of gold buying from central banks, led primarily by Western adversaries, notably China. This theme has continued under Trump, …including rising animosity between the U.S. and its long-held western allegiances, pushing countries to diversify their reserve base.”
Reads a Barrons headline today: “Buffet and gold win as S&P 500 struggles in this Trump market.” The story suggests that like gold, Berkshire Hathaway stock is a safe-haven asset. Berkshire stock hit a record high Tuesday.
Asian and European stock markets were mixed overnight. U.S. stock indexes are pointed to slightly lower openings when the New York day session begins. Risk aversion lingers in the general marketplace amid worries about slowing global economic growth amid heightened world trade tensions, and new geopolitical tensions.
The U.S. data point of the week will be the Federal Reserve Open Market Committee (FOMC) meeting that begins Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chair Powell. The marketplace expects no interest rate changes at this meeting, but it will closely parse wording coming from the FOMC statement and Powell’s presser. Reads a Wall Street Journal headline today: “Powell contends with double threat of economic chaos and political hostility.”
The key outside markets today see the U.S. dollar index slightly weaker. Nymex crude oil futures prices are firmer and trading around $68.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.308%.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook retail sales report, new residential construction, import and export prices, and industrial production and capacity utilization.
Technically, April gold futures bulls have the strong overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $3,100.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,900.00. First resistance is seen at the overnight contract high of $3,038.00 and then at $3,050.00. First support is seen at the overnight low of $3,008.20 and then at $3,000.00. Wyckoff's Market Rating: 9.5.
May silver futures bulls have the firm overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the October 2024 high of $35.80. The next downside price objective for the bears is closing prices below solid support at this week’s low of $32.215. First resistance is seen at last week’s high of $34.86 and then at $35.00. Next support is seen at the overnight low of $34.325 and then at $34.00. Wyckoff's Market Rating: 7.0.
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