Gold And Silver Prices Stabilize After Beatdown
New York (May 16) Gold and silver prices are steady to slightly up in early-afternoon U.S. trading Tuesday. Earlier in the session, both metals saw follow-through selling pressure after strong losses posted Tuesday. Gold prices hit a five-month low overnight. June Comex gold futures were last up $0.60 an ounce at $1,291.00. July Comex silver was last up $0.081 at $16.35 an ounce.
The surging U.S. dollar has been a major factor working against the precious metals market bulls over the past few weeks. The U.S. dollar index hit another five-month high overnight, but had backed off its daily highs as of midday today, which lent just a bit of support to the precious metals.
The gold and silver bulls need a dose of geopolitical unrest to wrestle their metals away from the grip of the appreciating greenback. Their wish may be granted as it appears the U.S.-North Korea summit in June is unraveling, which is not surprising to many. North Korea has cancelled talks with South Korea and now says it will not completely disarm its nuclear arsenal. The U.S. has not formally responded. This development could flare up into a markets-moving geopolitical event in the near term.
Attention of the marketplace this week is also on U.S. trade meetings with China in Washington, D.C. Also, a possible U.S. decision on the NAFTA trade agreement with Canada and Mexico could be announced late this week, but many are skeptical it will happen so soon.
Something else to keep an eye on: The Turkish currency, the lira, fell to a record low against the U.S. dollar overnight, which prompted the Turkish central bank to issue a warning about “unhealthy” developments in the markets. In years past, unstable secondary currency markets have produced a contagion effect in the major currencies. This is not the case now, but it still warrants monitoring. Any tensions in the currency markets would likely prompt safe-haven demand for gold and silver.
The other key “outside market” today finds Nymex crude oil prices weaker and near $71.00 a barrel, and not far below Tuesday’s 3.5-year high.
KitcoNews
