(Kitco News) – Gold prices are modestly down in midday U.S. trading Tuesday, on some mild profit taking pressure from the shorter-term futures traders, and amid a firmer U.S. dollar index on this day. Still, bullish near-term technical postures continue to limit selling interest in both gold and silver markets. June gold futures were last down $2.00 at $1,778.00 and July Comex silver was last up $0.183 at $26.43 an ounce.
The main U.S. economic event of the week will be the Federal Reserve’s Open Market Committee (FOMC) meeting that began Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chair Powell. While no change in U.S. monetary policy is expected, the marketplace will closely scrutinize the Fed’s inflation outlook and any comments on the future path of monetary policy.
Speaking of inflation, in the raw commodity world let’s take a peek at what’s going on in several markets. Corn futures prices just hit a nearly eight-year high overnight, and are trading above $7.20 a bushel. Soybeans are also at a nearly eight-year and high nearing $16.00 a bushel, and wheat futures are at an eight-year high above $7.50 a bushel. Hog futures are at 6.5-year high. Copper futures are at a 10-year high, Chinese steel futures are at record highs, coffee futures prices hit a nearly four-year high this week, and lumber futures are at record highs. For perspective in lumber, the last bull run in 2018 saw futures prices hit a then-record-high of $659.00 per thousand board feet. This week prices have skyrocketed to $1,420.00 and are still climbing. Many Americans who wanted to build new homes this year are putting it off because lumber prices are too high. Those who think consumer and producer price inflation won’t become problematic down the road my want to ponder this paragraph.
The key outside markets today see the U.S. dollar index firmer on a mild corrective bounce from recent selling pressure. Nymex crude oil prices are higher and trading around $62.40 a barrel. Meantime, the yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.595%.
Technically, June gold futures bulls have the overall near-term technical advantage as prices are in a four-week-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,800.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,723.20. First resistance is seen at the April high of $1,898.40 and then at $1,800.00. First support is seen at this week’s low of $1,768.20 and then at last week’s low of $1,763.50. Wyckoff’s Market Rating: 6.0
July silver futures bulls have the overall near-term technical advantage. Prices are in a four-week-old uptrend on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $27.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $25.00. First resistance is seen at today’s high of $26.56 and then at the April high of $26.765. Next support is seen at this week’s low of $25.935 and then at last week’s low of $25.715. Wyckoff’s Market Rating: 6.0.
July N.Y. copper closed up 365 points at 448.10 cents today. Prices closed near mid-range today and hit another contract and nearly 10-year high. The copper bulls have a strong overall near-term technical advantage. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at 460.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 420.00 cents. First resistance is seen at today’s contract high of 452.50 cents and then at 455.00 cents. First support is seen at today’s low of 443.50 and then at 440.00 cents. Wyckoff’s Market Rating: 9.5.
