Gold bounces slightly on bargain hunting aand short-covering
New York (Apr 22) Gold prices are steady to slightly higher in early trading, supported by some mild short covering and bargain hunting following recent selling pressure. A weaker U.S. dollar index Tuesday is also a bit supportive for the precious metals markets. Still, the bearish technical postures presently in place for gold and silver markets are keeping buyers wary. June gold was last up $1.50 at $1,290.00 an ounce. Spot gold was last quoted down $0.90 at $1,289.75. May Comex silver last traded up $0.114 at $19.465 an ounce.
In overnight news, Asian and European stock markets were quieter and traded mixed to mostly firmer amid no major, fresh fundamental news to move prices. U.S. stock indexes were firmer in early electronic trading Tuesday.
Reports Tuesday said China’s central bank has announced it is reducing its reserve requirement ratio for its rural commercial banks. This move is an easing of monetary policy to try to stimulate the ag sector of the Chinese economy. Major banks in urban areas of China were not included in the move.
Traders and investors are awaiting key Chinese economic data due out Wednesday: the HSBC April manufacturing PMI for China. Recent China economic data has been mostly downbeat by not meeting market expectations.
The Russia-Ukraine crisis has de-escalated early this week. While U.S. and Russia have agreed to work to tamp down this potential geopolitical flashpoint, both sides are once again trading barbs. U.S. Vice President Joe Biden is presently in Kiev for talks with Ukrainian officials. While tensions have temporarily eased regarding this matter, it’s my bias the situation will flare up again and likely sooner rather than later.
U.S. economic data due for release Tuesday includes the Goldman Sachs and Johnson Redbook weekly retail sales reports, the monthly house price index, existing home sales, and the Richmond Fed business survey.
The London A.M. gold fixing is $1,290.75 versus the previous P.M. fixing of $1,299.00.
