Gold prices pause Tuesday, while equities rally despite storm clouds
London (June 2) Gold prices are near steady in early U.S. trading Tuesday. The safe-haven metal is being supported by safe-haven demand as the U.S. dollar sinks amid major civil unrest in America. However, limiting the upside for the precious metals is stock market traders that appear to be wearing blinders as they push equities prices north--despite keen turmoil in the world. August gold futures were last up $1.20 an ounce at $1,751.70. July Comex silver prices were last down $0.037 at $18.79 an ounce.
Global stock markets were mostly firmer in overnight trading. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Stock markets are at present seemingly ignoring major storm clouds churning, including the Covid-19 pandemic that has severely crippled world economies, a looming “cold war” between the two largest economies in the world—the U.S. and China, and civil unrest in the U.S. that has exploded into violence not seen in over 50 years. Many market watchers are reckoning the strength of world stock markets is mainly due to the enormous injection of monetary stimulus by central banks into economies that sees much of that money flowing into equities. The juxtaposition of a rallying Wall Street and a struggling Main Street could have significant political implications down the road.
In other news, the U.S. Congressional Budget Office said a full U.S. economic recovery from the damage caused by the pandemic could take 10 years.
The important outside markets see the U.S. dollar index lower early today and hitting another 2.5-month low overnight. The greenback is in a swoon due in part to the civil unrest in America. Currencies in countries that are more outside the present fray are benefitting, including the Australian and Canadian dollars and the British pound. Nymex crude oil prices are higher and trading around $36.50 a barrel. The yield on the benchmark U.S. Treasury 10-year note is currently around 0.68%.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the ISM New York report on business and domestic auto industry sales.
Technically, the gold bulls have the firm overall near-term technical advantage and are keeping alive a price uptrend on the daily bar chart. 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 $1,668.40. First resistance is seen at this week’s high of $1,761.00 and then at $1,775.00. First support is seen at this week’s low of $1,737.60 and then at $1,725.00.
KitcoNews
