Gold price at record high on monetary-policy-easing ideas

(Kitco News, Tues. Mar. 5th, 2024) – Gold prices are modestly up in early U.S. trading but hit a record high of $2,135.80, basis nearby Comex futures, in overnight trading. Silver prices are higher and scored a two-month high overnight. Precious metals traders early this week are focusing on the prospects of easier monetary policies this year from the major central banks of the world. That would extrapolate into better consumer and commercial demand for metals and also theoretically pressure the U.S. dollar index and lower U.S. Treasury yields. April gold was last up $6.30 at $2,132.60. May silver was last up $0.169 at $24.16.

Asian and European stock markets were mixed to weaker in overnight trading. U.S. stock index futures are set to weaker when the New York day session begins.

This week sees China’s National People’s Congress, including the Chinese People’s Political Consultative Conference. China’s government set a 5% annual or so GDP growth target, which was stronger than most expected and viewed skeptically by the marketplace. “It is not easy for us to realize these targets,” Prime Minister Li Qiang told delegates of the National Peoples’ Congress. China officials also laid out plans to issue 1 trillion yuan ($139 billion) of ultra-long special government bonds this year. Reads a Wall Street Journal headline today: “Xi accepts slowdown, risking stagnation.” The story said, “It is the end of the Chinese growth miracle as we know it,” and China’s leader Xi Jinping is fine with that.

In other overnight news, the Euro zone producer price index for January came in down 8.6%, year-on-year. Most of the decline was in the energy sector.

The key outside markets today see the U.S. dollar index a bit firmer. Nymex crude oil prices are down and trading around $78.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching 4.18%.

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook retail sales report, the U.S. services purchasing managers index (PMI), the ISM report on business services, the RCM-TIPP economic optimism index, manufacturers’ shipments and inventories, and the global services PMI. Today is also the “super Tuesday” presidential primary balloting. Also on tap this week, Fed Chairman Powell addresses Congress on Wednesday and Thursday, and the monthly U.S. employment report is out on Friday.

Technically, the gold futures bulls have the solid overall near-term technical advantage and have momentum. A steep three-week-old uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at $2,200.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $2,050.00. First resistance is seen at the overnight high of $2,135.80 and then at $2,150.00. First support is seen at the overnight low of $2,118.50 and then at $2,100.00. Wyckoff’s Market Rating: 8.0.

The silver bulls have gained the overall near-term technical advantage and have momentum. Silver bulls’ next upside price objective is closing May futures prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at the February low of $22.19. First resistance is seen at the overnight high of $24.215 and then at $24.50. Next support is seen at the overnight low of $23.845 and then at $23.50.

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com