(Kitco News) - Gold and silver futures prices are solidly higher in midday U.S. trading Tuesday, on continued safe-haven demand, especially from China. A weaker U.S. dollar index and sharp gains in crude oil prices are also bullish outside markets for the precious metals on this day. June gold was last up $82.70 at $3,405.40. May silver prices were last up $0.84 at $33.045.
A Dow Jones Newswires headline today reads: “Gold futures rally as market hopes fade for swift trade war resolution.” President Trump said just moments ago that he has not spoken to Chinese officials on any trade matters.
Broker SP Angel today reports that according to Bloomberg the Shanghai Gold Exchange is planning to boost its warehouse network to Hong Kong, operated by the Bank of China. “The move is intended to promote yuan-denominated gold benchmarking as Beijing looks to exert more control over commodity pricing. The Shanghai gold exchange has seen record volumes in recent quarters as Chinese retail saw heavy buying.”
The big fundamental event for this week is the Federal Open Market Committee meeting (FOMC) of the Federal Reserve. The meeting began Tuesday morning and ends Wednesday afternoon. The marketplace consensus is that the FOMC will not lower U.S. interest rates. As always, the FOMC statement and press conference from Fed Chair Jerome Powell will be very closely scrutinized for clues on the trajectory of Fed monetary policy in the weeks and months ahead. Wording on inflationary pressures will also be very important to the marketplace, as will the central bank’s latest take on trade tariffs and the global trade war.
I would not be surprised to see the shorter-term gold and silver futures traders, but especially gold traders, ring the cash register and take some profits just after the FOMC statement is released Wednesday afternoon. We’ve seen the price bursts in gold and to a lesser degree in silver this week. Now it may be time for pauses or corrective pullbacks in the existing price uptrends in both metals.
U.S. stock indexes are lower at midday today. Risk aversion is creeping back into the general marketplace amid no major breakthroughs announced on the global trade war front.
The key outside markets today see the U.S. dollar index weaker. Nymex crude oil futures prices are solidly higher and trading around $59.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.35%.
Technically, June gold futures bulls have the solid overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the contract/record high of $3,509.90. 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 $3,442.30 and then at $3,475.00. First support is seen at $3,350.00 and then at today’s low of $3,332.10. Wyckoff's Market Rating: 8.0.
May silver futures bulls have the overall near-term technical advantage. 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 $31.00. First resistance is seen at $33.50 and then at $33.69. Next support is seen at $32.48 and then at $32.00. Wyckoff's Market Rating: 6.0
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