Gold Prices Modestly Up On Lukewarm Safe-Haven Demand

Date: 06/05/2019

Jim Wyckoff Monday May 06, 2019 13:47

Kitco News

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(Kitco News) – Gold prices are a bit higher in early-afternoon U.S. trading Monday, on tepid safe-haven demand from geopolitical developments that tanked world stock markets today. Still, bulls are disappointed their yellow metal could not muster more price strength on a day when traders and investors were on edge. June gold futures were last up $2.30 an ounce at $1,283.60. July Comex silver was last down $0.048 at $14.93 an ounce.

World stock markets were rattled and traded sharply lower Monday on news that President Trump tweeted a threat to further increase U.S. trade tariffs on Chinese goods. However, U.S. stock indexes were well off their daily lows in midday price action. The sense of the marketplace had been that a U.S.-China trade deal was close and could be finalized late this week. Other commodity markets were also roiled today on ideas an escalation in the U.S.-China trade war would translate into slower global economic growth.

Reports said the Chinese trade delegation is still headed to the U.S. for talks this week. Upon reflection, many traders and investors realized they should not have become so optimistic on the trade war being resolved, given Trump’s propensity to make knee-jerk decisions.

China stock markets fell from 5% to 7% overnight, making those losses the largest one-day declines in three years.

The Chinese yuan plunged on the world foreign exchange market. The U.S. dollar index is trading slightly down today, while Nymex crude oil prices slightly up and trading around $62.00 a barrel.

Adding to geopolitical concerns to start the trading week, the U.S. is sending a naval task force, including an aircraft carrier, to the Middle East as a show of force against Iran. A U.S. official said the U.S. warships are “fully prepared” to respond to any attack from Iran or others.

Technically, June gold futures prices closed near mid-range today. The bears still have the overall near-term technical advantage. A 2.5-month-old downtrend is in place on the daily bar chart. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,250.00. First resistance is seen at today’s $1,287.40 and then at $1,290.90. First support is seen at today’s low of $1,278.10 and then at $1,275.00. Wyckoff’s Market Rating: 3.5.

July silver futures prices closed near mid-range today. The silver bears have the firm overall near-term technical advantage. A 2.5-month-old downtrend is in place on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $15.25 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the November low of $14.175. First resistance is seen at $15.00 and then at $15.15. Next support is seen at today’s low of $14.77 and then at last week’s low of $14.77. Wyckoff’s Market Rating: 3.0.

July N.Y. copper closed up 175 points at 283.65 cents today. Prices closed near the session high and did hit a four-month low early on today. Prices also scored a bullish “outside day” up on the daily bar chart today. The copper bulls have regained the slight overall near-term technical advantage. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at 291.35 cents. The next downside price objective for the bears is closing prices below solid technical support at 270.00 cents. First resistance is seen at 286.00 cents and then at 288.00 cents. First support is seen at 280.00 cents and then at 277.50 cents. Wyckoff’s Market Rating: 5.5.

By Jim Wyckoff