Gold sets new record highs then backs off a bit

(Kitco News, Mon. April 1st, 2024) – Gold prices are posting solid gains near midday after hitting a record high of $2,264.20 an ounce, basis nearby Comex futures, in overnight trading. Prices have backed down from their daily highs as the U.S. dollar index rallied today, while U.S. Treasury yields up-ticked. Silver prices are posting modest gains. The precious metals are seeing buying support following a mild U.S. inflation report released last Friday, when U.S. markets were closed for a holiday. June gold was last up $20.50 at $2,259.00. May silver was last up $0.159 at $25.07.

Stock, financial and the precious metals markets were buoyed by last Friday’s report that the U.S. PCE price Index was up 0.3% in February compared to the previous month. The rise was slightly lower than the revised 0.4% increase in January and fell short of market forecasts for a 0.4% increase. The annual rate of PCE inflation rose marginally from 2.4% to 2.5%, aligning with forecasts. However, when considering the monthly core PCE inflation, which excludes volatile components such as food and energy and is a preferred measure of inflation by the Federal Reserve, there was a deceleration. The core PCE inflation rate slowed to a 0.3% rise from a revised 0.5% rise in January, matching the anticipated rate. This report favors the U.S. monetary policy doves, who want to see the Federal Reserve cut interest rates sooner rather than later.

Asian and European stock indexes were mixed to firmer overnight. Several European markets remained closed for the Easter holiday. U.S. stock indexes are weaker at midday.

In overnight news, China’s manufacturing purchasing managers index (PMI) for March came in at 50.8 from 49.1 in February and beat market expectations. A reading above 50.0 suggests expansion in the sector. Reads a Wall Street Journal headline today: “China’s manufacturing data reflect upturn, but host of hurdles remain.”

The key outside markets today see the U.S. dollar index solidly higher and hitting a 4.5-month high today. Nymex crude oil prices are higher, hit a 6.5-month high, and are trading around $84.25 a barrel.

Technically, June gold futures bulls have the strong overall near-term technical advantage. A six-week-old uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,300.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $2,200.00. First resistance is seen at $2,275.00 and then at the contract high of $2,286.40. First support is seen at $2,246.60 and then at at $2,233.30.

May silver futures bulls have the overall near-term technical advantage and are working on restarting a price uptrend on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the March high of $25.975. The next downside price objective for the bears is closing prices below solid support at $23.50. First resistance is seen at today’s high of $25.51 and then at $25.75. Next support is seen at today’s low of $24.855 and then at last week’s low of $24.445.

May N.Y. copper closed up 385 points at 404.55 cents today. Prices closed nearer the session low. The copper bulls have the overall near-term technical advantage but appear tired. Prices are in a seven-week-old uptrend on the daily bar chart. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at the March high of 416.40 cents. The next downside price objective for the bears is closing prices below solid technical support at 385.00 cents. First resistance is seen at today’s high of 407.80 cents and then at 4190.00 cents. First support is seen at today’s low of 402.50 cents and then at 400.00 cents.

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com