(Kitco News) - Gold futures prices are strongly higher in midday U.S. trading Monday, on more safe-haven demand, especially from China. Silver prices are modestly up. June gold was last up $74.90 at $3,318.20. May silver prices were last up $0.166 at $32.155.
A Saxo Bank analyst say strong retail demand for gold from Chinese consumers is keeping the yellow metal buoyant despite selling from Western speculators. Such indicates Chinese citizens are very concerned about the health of the Chinese economy and seeking safe-haven gold.
This week comes the Federal Reserve’s interest rate decision on Wednesday afternoon. No change in U.S. monetary policy is expected at this week’s FOMC meeting that begins Tuesday morning.
Veteran market watchers will be closely watching how the crude oil market reacts in the immediate aftermath of the FOMC results. Crude oil is the leader of the raw commodity sector. Its daily price moves have a significant influence on many other commodity markets’ daily price action, including the metals. A surprisingly hawkish lean by the Fed would likely further pressure oil prices. A surprisingly dovish lean on U.S. monetary policy would likely rally crude prices. Key price levels to watch in June crude oil futures after the FOMC meeting are the April low of $54.67. There is likely a good amount of pre-placed sell-stop orders just below that level, which if triggered would likely push prices to test $50.00 a barrel. A close in crude oil prices below the April low would be an ominously bearish development for commodity futures markets, including possibly, but not for certain, the precious metals. Conversely, a close in June crude above $62.50 would suggest a market bottom is in place in oil and that trader and investor risk appetite in the general marketplace has improved. That’s an important element for the speculative traders to become more active on the long sides of commodity futures markets. But again, such a scenario may be a mixed bag for gold.
The key outside markets today and see the U.S. dollar index slightly lower. Nymex crude oil futures prices are lower and trading around $57.25 a barrel. OPEC has agreed to raise its collective crude oil production starting in June, reports said. The yield on the benchmark 10-year U.S. Treasury note is presently at 4.343%.
Technically, June gold futures bulls have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $3,400.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at last week’s low of $3,209.40. First resistance is seen at $3,350.00 and then at $3,370.00. First support is seen at $3,300.00 and then at the overnight low of $3,243.10. Wyckoff's Market Rating: 6.5.
May silver futures bulls have the slight overall near-term technical advantage but need to show more power soon to keep it. Silver bulls' next upside price objective is closing prices above solid technical resistance at $33.69. The next downside price objective for the bears is closing prices below solid support at $30.00. First resistance is seen at Friday’s high of $32.675 and then at $33.00. Next support is seen at today’s low of $31.915 and then at last week’s low of $31.685. Wyckoff's Market Rating: 5.5.
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