Gold up a bit on perceived bargain hunting

(Kitco News, Wed. April 24th, 2024) – Gold prices are slightly higher and silver prices near steady in midday U.S. trading Wednesday. Still-bullish bargain hunters are mildly stepping back in to buy the present dips in prices. June gold was last up $2.90 at $2,345.00. May silver was last down $0.007 at $27.355.

The precious metals bulls are working to halt the downside price corrections presently in place. Downside price corrections in existing uptrends can be painful for the bulls, but they are a normal occurrence in all traded markets. Importantly, the price uptrends on the daily bar charts for gold and silver are still in place and have not been broken. More strong selling pressure in the near term would likely do such, to then begin to suggest near-term market tops are in place.

An important theme has developed in the marketplace, especially in the foreign exchange market, the past few months. DowJones Newswires today has a headline that reads: “Asian central banks face policy dilemma from Fed rate-cut delay, FX crunch.” In the story, reporter Fabiana Negrin Ochoa says a surprise rate hike by Indonesia’s central bank accentuates expectations that the start of monetary policy easing is looking increasingly far off for many Asian central banks — if on the horizon at all. The Asian central banks fear they cannot cut rates before the Federal Reserve because it would further undermine their currencies that are already feeling the pressure of an appreciating U.S. dollar. Asian central banks lowering rates before the Fed does risks pushing inflation in the region higher. Yet, by delaying rate cuts the Asian central banks risk curbing economic growth by keeping borrowing costs higher. Recently, the Japanese yen and Chinese yuan have depreciated significantly against the dollar, as well as the currencies of South Korea, Indonesia and Malaysia.

The key outside markets today see the U.S. dollar index firmer. Nymex crude oil prices are slightly down and trading around $83.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is fetching 4.652%. These three markets are in bearish daily postures for the precious metals at mid-week, which is also adding to selling pressure in gold and silver — especially from the shorter-term futures traders.

Technically, June gold futures bulls have the firm overall near-term technical advantage. They are keeping alive a nine-week-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,400.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $2,250.00. First resistance is seen at $2,370.00 and then at $2,400.00. First support is seen at today’s low of $2,344.90 and then at this week’s low of $2,304.60.

May silver futures bulls have the firm overall near-term technical advantage. A two-month-old price uptrend on the daily bar chart is still alive. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $29.00. The next downside price objective for the bears is closing prices below solid support at $25.00. First resistance is seen at today’s high of $27.525 and then at $28.00. Next support is seen at today’s low of $27.06 and then at this week’s low of $26.715.

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com