Gold rallies on bargain hunting, short covering

NEW YORK (May 15) Gold prices are solidly up in midday U.S. trading Thursday. Bargain hunting in the cash and futures markets is featured, along with some short covering in the futures market. Silver prices are modestly higher. Risk appetite in the general marketplace has receded a bit late this week, which is also friendly for the safe-haven metals. June gold was last up $34.30 at $3,223.20. July silver prices were last up $0.226 at $32.67.

A much-lower-than-expected U.S. producer price index report was also friendly for gold and silver, as it fell into the camp of the U.S. monetary policy doves. The April PPI was down 0.5%, month-on-month, compared to expectations for a rise of 0.3%.

U.S. stock indexes are modestly up at midday on a pause after recent strong gains. Said David Morrison with Trade Nation today in an email dispatch: “It now feels as if the market is in limbo. There’s still a lack of clarity surrounding the Trump administration’s trade policies and this has created a feeling of uncertainty over the global economic outlook. All eyes are now focused on talks between the U.S. and other trading partners such as Japan, India and South Korea. Meanwhile, there are concerns about the extent of damage that may have already been done since President Trump announced his program of reciprocal tariffs early last month.”

The key outside markets today see the U.S. dollar index weaker. Nymex crude oil futures prices are lower and trading around $61.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.5%.  

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