(Kitco News) - Gold and silver prices are solidly higher in midday U.S. trading Tuesday and have extended modest earlier daily gains. The general marketplace is still a bit unsettled following the surprise ratings agency downgrade to U.S. government debt by Moody’s late last week. June gold was last up $48.20 at $3,281.70. July silver prices were last up $0.518 at $33.025.
The Moody’s U.S. debt downgrade is near-term bullish for gold and silver markets. The renewed focus on U.S. fiscal and debt problems this week have pressured the U.S. stock indexes a bit and in turn prompted fresh safe-haven demand for the two precious metals. However, it’s likely the Moody’s news will wear off quickly and marketplace attention will then be more on inflation worries and the Fed likely standing pat on interest rates for at least the next several weeks. The scenario of a less dovish Federal Reserve is a bearish element for gold and silver markets. That scenario would be U.S. dollar-bullish. Globally, less dovish central banks may mean less consumer demand for precious metals.
U.S. stock indexes are weaker near midday.
In overnight news, China’s monetary authorities lowered a main interest rates Tuesday, following some downbeat economic data coming from the world’s second-largest economy on Monday. Australia’s central bank also cut its main interest rate Tuesday.
In other news, JP Morgan’s chief, Jamie Dimon, in a speech on Monday warned that the full impact of the U.S.-China trade war has not yet been felt by businesses and consumers and that the stock market could tumble again. “It’s an extraordinary amount of complacency” in the marketplace, said Dimon.
The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil futures prices are weaker and trading around $62.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.45%.
Technically, June gold futures bulls have regained the slight overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $3,350.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the May low of $3,123.30. First resistance is seen at today’s high of $3,288.90 and then at $3,300.00. First support is seen at $3,250.00 and then at the overnight low of $3,207.40. Wyckoff's Market Rating: 5.5.
July silver futures bulls also have the slight overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $33.48. The next downside price objective for the bears is closing prices below solid support at $31.00. First resistance is seen at $33.00 and then at $33.48. Next support is seen at $3,250.00 and then at the overnight low of $32.235. Wyckoff's Market Rating: 5.5.
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