Gold sees price pause as U.S. stock market sells off

(Kitco News) – Gold prices are near steady and silver prices a bit firmer in early U.S. trading Monday. However, a very wobbly U.S. stock market that is under selling pressure again today is keeping a price floor under the safe-haven metals. Don’t be surprised to see gold prices get a better bid today if the U.S. stock indexes remain under strong selling pressure. April gold was last down $1.30 at $2,912.80. May silver prices were last up $0.166 at $32.975.

Asian and European stock markets were mostly lower overnight. U.S. stock indexes are pointed to solidly lower openings when the New York day session begins. It appears U.S. traders and investors are becoming more worried about trade tariffs causing a U.S. recession. Commenting in a television interview on the U.S. economic outlook, President Trump declined to rule out a recession. He said “there is a period of transition, because what we’re doing is very big. …We’re bringing wealth back to America. …That’s a big thing, and there are always periods, it takes a little time.”

In other overnight new, the Bank of Japan kept interest rates unchanged in the 4.25-4.50% range, opting for a wait-and-see approach due in part the global economic uncertainty.

The key outside markets today see the U.S. dollar index weaker. Nymex crude oil futures prices are firmer and trading around $67.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently at 4.25%.

U.S. economic data due for release Monday includes the employment trends index.

Technically, April gold futures bulls have the solid overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $2,974.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at last week’s low of $2,844.10. First resistance is seen at the overnight high of $2,926.40 and then at this week’s high of $2,941.30. First support is seen at $2,900.00 and then at $2,892.50.

May silver futures bulls have the slight overall near-term technical advantage. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the February high of $34.56. The next downside price objective for the bears is closing prices below solid support at $31.00. First resistance is seen at last week’s high of $33.38 and then at $34.00. Next support is seen at $32.50 and then at $32.00.

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com