(Kitco News) - Gold and silver prices are posting decent gains in midday U.S. trading, but down from session highs. Bulls stepped in to buy the price dips and do some perceived value-buying as it appears the bears became exhausted. June gold was last up $37.00 at $3,010.00. May silver prices were last up $0.340 at $30.01.
U.S. stock indexes are sharply higher at midday. Risk aversion has ebbed. However, it’s doubtful marketplace confidence will return to normal levels anytime soon. The near-daily new tariff-related pronouncements from the White House and/or other major countries will keep traders and investors on the edge of their seats and keep risk aversion elevated.
The Wall Street Journal in a story today sums up why the marketplace is so anxious at present. “Whether world trade collapses, like it did in the 1930s, depends on whether other countries retaliate and Trump negotiates. The last time the U.S. raised tariffs as dramatically as President Trump promised was in 1930. Most historians can tell you what happened after President Herbert Hoover signed the Smoot-Hawley tariff into law that year: Global trade collapsed, aggravating the world’s slide into depression.”
China and the U.S. continue in their tariff stare down, with neither blinking. Some market watchers are focusing on a potential China devaluation of its currency, the yuan, in order for China to get better global trade advantages. Reports said China’s central bank has been weakening its daily reference rate past the 7.2 level versus the U.S. dollar. The yuan versus the dollar is near its weakest level since September of 2023.
The key outside markets today see the U.S. dollar index up a bit. Nymex crude oil futures prices are up and are trading around $61.25 a barrel.
The yield on the benchmark 10-year U.S. Treasury note presently at 4.191%. U.S. Treasury yields are on the rise this week despite the risk aversion that is still in the general marketplace. (Such would normally invite flight-to-quality demand for U.S. Treasuries, lowering their yields.) Rising Treasury yields suggest two scenarios: One, that bond market traders (called the smartest guys/gals in the room) think the worst of the stock/financial market turmoil has passed. Or two: The financial turmoil may or may not have peaked but bond traders do expect slowing global economic growth and higher inflation, which is called deflation.
Technically, June gold futures bulls have the firm overall near-term technical advantage. This week’s price action suggests the bears are exhausted from the recent selling pressure. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $3,201.60. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,950.00. First resistance is seen at today’s high of $3,037.90 and then at $3,050.00. First support is seen at $3,000.00 and then at this week’s low of $2,970.40. Wyckoff's Market Rating: 7.0.
May silver futures bulls and bears are on a level overall near-term technical playing field. This week’s price action suggests the bears became exhausted and that a near-term price bottom is in place. Silver bulls' next upside price objective is closing prices above solid technical resistance at $32.00. The next downside price objective for the bears is closing prices below solid support at this week’s low of $27.545. First resistance is seen at this week’s high of $30.76 and then at $31.00. Next support is seen at the overnight low of $29.81 and then at $29.50. Wyckoff's Market Rating: 5.0.
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