(Kitco Fri. May 31st, 2019) – Gold prices are posting double-digit gains and have pushed back above $1,300.00 in early-morning U.S. trading Friday. Safe-haven demand is in play on this last trading day of the week and of the month, as world equity markets wobble. June gold futures were last up $11.10 an ounce at $1,303.50. July Comex silver prices were last up $0.009 at $14.495 an ounce.
European and Asian stock markets sold off overnight as trader and investor anxiety has up-ticked late this week. U.S. stock indexes are also pointed toward solidly lower openings when the New York day session begins and hit three-month lows overnight.
President Trump late Thursday surprisingly announced new trade tariffs set to go into effect in June against imports from Mexico, in order to persuade that country to help the U.S. battle illegal immigration from the Mexican border with the U.S.
To further rattle the markets, there was more dour economic news coming out of China today. Its manufacturing purchasing managers index (PMI) for May came in at 49.4 versus 50.1 in April and a 49.9 forecast. China’s May services PMI was 54.3, the same as in April and in line with market expectations. A reading below 50.0 suggests contraction in the sector, while a number above suggests growth.
U.S. Treasury prices are also rallying on safe-haven demand amid the global stock market sell off.
The key “outside markets” today see the U.S. dollar index trading modestly down. Meantime, Nymex crude oil prices are lower, hit a 3.5-month low overnight and are trading around $55.50 a barrel.
U.S. economic data due for release Friday includes personal income and outlays, the ISM Chicago business survey, and the University of Michigan consumer sentiment survey.
For the last couple of weeks, we have watched gold try to break out to the downside and were looking for $1,240, but the $1,270 level has held, and the shorts appear concerned. For past four to five days, gold has made higher lows within the consolidation pattern and this morning is breaking out to the upside.
A close above $1,300 would be a sign the bottoms are in and gold would become a buy. This should be no surprise; we constantly remind traders and investors that eventually consolidation ends, and a breakout will occur. Gold looks to be breaking out to the upside. The next couple of days will confirm whether we are breaking out or stay in congestion.
Posted By :
Jack Dempsey, President
401 Gold Consultants LLC
jdemp2003@gmail.com