Gold prices up on safe-haven bids, bullish charts
New York (June 23) Gold prices are moderately higher in early U.S. trading Tuesday as bulls are out of the gate in good fashion this week. Safe-haven demand is featured amid a troubling increase in Covid-19 infections around the globe. The technical charts for gold and silver are also fully bullish. August gold futures were last up $4.60 an ounce at $1,771.10. July Comex silver prices were last up $0.033 at $17.935 an ounce.
Global stock markets were mostly up in overnight trading. U.S. stock markets are pointed toward higher openings when the New York day session begins. Equities markets were lifted in part overnight following a tweet from President Trump that said the U.S.-China Phase 1 trade deal is still very much in place. This comes following and after-hours sell off after one of Trump’s top economic advisors, China-hawk Peter Navarro, on Monday evening suggested in a TV interview that the trade deal was off. Trump’s tweet a bit later prompted the rebound.
Trader and investor sentiment is also mostly upbeat amid recent data from major world economies that shows they are rebounding from the Covid-19 pandemic shutdowns much more rapidly than most expected. Overnight the Euro zone June flash composite purchasing managers index (PMI) was reported at 46.9 versus expectations for a reading of 40.0 and compares to May’s 31.9. A reading below 50.0 suggests contraction.
However, a disturbing rise in Covid infections in some parts of the world, including some U.S. states, is being watched very closely by the marketplace and could soon dent risk appetite. If the rates of infections continue to increase, the debate will intensify regarding shutting businesses back down. Such would deal a catastrophic blow to the now-recovering economies and would likely send stock markets careening lower. The gold market is presently getting a safe-haven bid on these notions.
The important outside markets today see Nymex crude oil prices higher and trading around $41.50 a barrel. The U.S. dollar index is weaker early today. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.68% level.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the U.S. flash manufacturing and services PMIs, the Richmond Fed business survey, and new residential sales.
Technically, the gold bulls have the solid overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in August futures above solid resistance at the April high of $1,789.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,718.00. First resistance is seen at Monday’s high of $1,779.00 and then at $1,789.00. First support is seen at the overnight low of $1,758.30 and then at Monday’s low of $1,753.50.
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