Gold and silver up on safe-haven demand amid gloomy economic outlooks
New York (May 14) Gold and silver prices are solidly up in midday U.S. trading Thursday. Safe-haven demand is featured late this week as global stock markets have become shaky again. A growing number of economists are now projecting longer recovery periods for major world economies, highlighted by Federal Reserve Chairman Jerome Powell Wednesday providing a grim picture of the U.S. economy and its path out of the pandemic. Gold prices hit a three-week high today and silver notched a four-week high. June gold futures were last up $25.50 an ounce at $1,741.80. July Comex silver prices were last up $0.474 at $16.135 an ounce.
Today’s weekly jobless claims report showed new claims of 2.98 million. The latest reading was just above expectations of around 2.5 million. Today’s figure is still markedly down from weekly jobless numbers seen recently.
Global stock markets were mixed to lower in overnight trading. U.S. stock indexes are mixed at midday but well up from their session lows. Traders and investors continue to assess and reassess the Covid-19 situation as it pertains to global, national and local economies. Human nature appears to be competing more and more with continued warnings from health experts--meaning people that have been cooped up for two months desperately want to get out and resume more normal lives, even though the pandemic is far from being under control and no vaccine is on the horizon.
U.S.-China relations remain close to the front burner of the marketplace. The U.S. this week has accused China of hacking U.S. firms working on a Covid-19 vaccine. President Trump said Thursday morning in a TV interview that the U.S. could “cut off the whole relationship” with China. Given the already strained relations between the world’s two largest economies, it’s hard to imagine they will emerge from the current health crisis without profound and permanent changes in their relationship, including supply chains.
The important outside markets see Nymex crude oil futures higher early today and trading around $26.75 a barrel. The International Energy Agency Thursday said global oil demand in May will drop by 21.5 million barrels—outstripping the recent supply reductions. The U.S. dollar index is firmer today. The yield on the benchmark U.S. Treasury 10-year note is currently around 0.61%.
Technically, June gold futures bulls have the solid overall near-term technical advantage and gained more power today. Gold bulls' next upside near-term price objective is to produce a close above solid technical resistance at the April high of $1,788.80. Bears' next near-term downside price objective is pushing prices below solid technical support at $1,666.20. First resistance is seen at today’s high of $1,746.50 and then at $1750.00. First support is seen at $1,725.00 and then at today’s low of $1,716.00. Wyckoff's Market Rating: 7.5. ]
July silver futures bulls have the overall near-term technical advantage and gained more power today. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the April high of $16.30 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the April low of $14.715. First resistance is seen at $16.25 and then at the April high of $16.505. Next support is seen at today’s low of $15.66 and then at $15.50.
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