Gold prices near steady as global stock markets gain
London (Apr 28) Gold prices are not far from unchanged on the day in early U.S. trading Tuesday. More chart consolidation and some profit taking by the shorter-term futures traders are featured early this week. The gold market bulls are still encouraged by their metal’s stability amid rallies in global stock markets recently. This week’s drop in crude oil prices has somewhat curtailed demand for the precious metals. June gold futures were last up $1.60 an ounce at $1,725.60. May Comex silver prices were last down $0.015 at $15.195 an ounce.
Global stock markets were mixed in overnight trading, while the U.S. stock indexes are pointed toward higher openings and at or near seven-week highs when the New York day session begins. Some regions in some countries, including the U.S., are reopening at least some businesses that have been shuttered from the Covid-19-induced lockdown. People around the globe are starting to suffer from what is being called “quarantine fatigue,” which means many are starting to ignore social-distancing guidelines and are eager to see economies reopen—while government leaders debate the timing of reopening commerce. Reports say U.S. automakers plan on restarting their plants on May 18.
A feature in the marketplace early this week is another big drop in crude oil prices, with Nymex crude presently trading around $11.85 a barrel. There is growing talk that Nymex crude prices will again fall into negative territory when the June contract nears expiration in late May. There is no place to store oil amid a glutted world market that has seen a historic demand shock. OPEC will begin its previously announced oil-production cuts later this week but that has had no positive impact on oil prices.
Key central bank meetings occur this week, including those of the Federal Reserve (FOMC) and the European Central Bank. The FOMC meeting begins today and ends Wednesday afternoon with a statement. The Fed over the past few weeks has aggressively flooded the U.S. financial system with liquidity. Market watchers will be keen to see what the FOMC statement says, including any new monetary policy moves. Key U.S. corporate earnings reports are also due out this week.
The other important outside markets today see the U.S. dollar index solidly lower. The greenback bulls are fading this week, partly on notions other major countries’ economies are coming back to life faster than that of the U.S. The 10-year U.S. Treasury note yield is trading around 0.625% this morning.
U.S. economic reports due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, advance economic indicators, the S&P/Case-Shiller home price report, the Richmond Fed business survey, and the consumer confidence index.
Technically, the gold bulls have the solid overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $1,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at last week’s low of $1,666.20.
KitcoNews
