Gold and silver prices pause after hitting 3.5-mo. highs early on

New York (May 18)  Gold and silver prices are near steady at midday on a normal pause after notching 3.5-month highs in earlier trading Tuesday. The metals are being supported by a slumping U.S. dollar index and recently rising crude oil prices. The precious bulls are also enjoying very friendly technical charts at present. June gold futures were last down $0.80 at $1,866.60 and July Comex silver was last up $0.021 at $28.29 an ounce.

Global stock markets were mostly firmer overnight. U.S. stock indexes are mixed at midday. Global investor and trader risk appetite has somewhat improved Tuesday. For the moment at least, the marketplace is not paying much attention to the escalating fighting between Israel and Hamas that is the fiercest since 2014. The inflation debate remains close to the front burner of the marketplace. History shows that rising inflation has tended to benefit hard assets like the metals.

The key outside markets today see the U.S. dollar index lower and hitting a nearly three-month low. Meantime, Nymex crude oil prices are lower at midday on routine profit taking after hitting a two-month high early on today, and are trading around $65.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.645%. The German 10-year bund yield is trading at -0.109% and the U.K. 10-year gilt yield is 0.881%.

Technically, June gold futures are now back above the key 200-day moving average. The gold bulls have the firm overall near-term technical advantage. A seven-week-old price uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,900.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at today’s high of $1,875.90 and then at $1,881.00. First support is seen at $1,850.00 and then at this week’s low of $1,841.10.

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