(Kitco News) - Gold prices are posting strong gains and hit record highs in early U.S. trading Friday. June Comex futures hit a new high of $3,255.90 overnight. Silver prices are posting solid gains. Persistent safe-haven demand amid still-shaky global stock markets and a potentially wobbly U.S. Treasury market continue to fuel upside price action in the two precious metals. June gold was last up $57.70 at $3,235.20. May silver prices were last up $0.691 at $31.45.
Asian and European stock markets were mixed in overnight trading. U.S. stock indexes are pointed to higher openings today in New York. The U.S.-China trade war rages on, with each country once again ramping up tariffs on each other that now are well above 100%. Reads a Dow Jones Newswires headline today: “The U.S. and China are going to economic war—and everyone will suffer.”
This week there is a new, silent 800-pound gorilla in the marketplace room: the U.S. Treasury market. The Wall Street Journal’s Greg Ip today writes: “The stock-market meltdown that accompanied President Trump's intensifying trade war in recent weeks was unsettling enough. The fall in the U.S. dollar and rise in bond yields that went with it have been truly ominous. So ominous, it might be why Trump changed course, at least temporarily, by pausing some of his tariffs Wednesday. Normally when investors are this scared they seek safety, and nothing is safer than the U.S. dollar and Treasury debt. But despite mounting fear of recession, the usual flight to safety hasn't materialized.” If the U.S. Treasury market becomes unstable, a contagion effect could grip the entire global financial system.
David Morrison of Trade Nation writes in an email dispatch today’ that ”as far as the markets are concerned, it’s all about tariffs. The danger is that something is announced, whether good or bad, over a weekend, thereby forcing a dramatic reaction as markets reopen on a Sunday evening. This is typically when markets are at their most illiquid, meaning that moves can be violent.”
Gold prices soared to a new record high overnight, at $3,255.90, basis June Comex futures. Safe-haven demand continues to be featured.
The key outside markets today see the U.S. dollar index sharply down and at a three-year low. Nymex crude oil futures prices are near steady and trading around $60.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently at 4.403%.
U.S. economic data due for release Friday includes the producer price index and the University of Michigan consumer sentiment survey.
Technically, June 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 $3,300.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,100.00. First resistance is seen at the overnight contract high of $3,255.90 and then at $3,275.00. First support is seen at $3,200.00 and then at $3,160.00. Wyckoff's Market Rating: 9.0.
May silver futures bulls have the overall near-term technical advantage. 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 $33.00. The next downside price objective for the bears is closing prices below solid support at $29.50. First resistance is seen at $31.75 and then at $32.00. Next support is seen at the overnight low of $30.865 and then at Thursday’s low of $30.51. Wyckoff's Market Rating: 6.0.
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